Recapitalisation: SovereignTrust Insurance Offers Rights Issue to Shareholders
Sovereign Trust Insurance Plc is offering 4,170,411,648 ordinary shares by way of rights issue to its shareholders.
With this, the company seeks to upgrade its capital to the tune of N10 billion as a general business underwriter in response to the regulator’s new minimum required capital.
Sovereign Trust Insurance Chairman, Oluseun Ajayi, who announced this at the 24th Annual General Meeting of the company held in Lagos recently, said this was expected to be finalised by the third quarter of this year.
He urged the shareholders to pick up the offer while it last to beef up the company’s capital.
He said the company would consider other capital raising options during the course of the year, adding that this may involve bringing in foreign investors into the company.
On the performance of the company in 2018 business year, Ajayi, said with 118 per cent significant increase in the company’s profit after tax for the year ended December 31st, 2018, Sovereign Trust Insurance Plc, was poised and strategically positioned having set machinery in motion to remain afloat as a strong general insurance business underwriter to meet the regulator’s N10 billion capital requirement.
He said the company during the period under review grew its Gross Premium Written by 23 per cent to stand at N10.5 billion against N8.5 billion it made in 2017.
Its net premium equally grew by 31 per cent to N5.5 billion up from N3.85 billion figure in 2017.
Profit After Tax grew to N344 million, showing 118 per cent growth from N158 million net profit recorded by the company in 2017.
Commenting on the result, Ajayi said, “despite the challenging business environment, in the year 2018, I am delighted to report that your company returned to achieving steady revenue growth and continued our profit drive, our company was able to record gross premium written of N10.5 billion, representing a 23 per cent increase over N8.5 billion figure recorded in 2017.”
He attributed the profit track of the company to the management’s commitment to growth.
“This indicates the commitment to sustain the growth of both revenue and profitability, consequently, the return on capital employed recorded a positive performance of 9.29 per cent as against 1.87 per cent achieved in the corresponding year of 2017.