Mutual Benefits Assurance Rights Issue Opens Today
Determined to expand its operations particularly in the areas of oil and gas risk underwriting as well as life and pension insurances, Mutual Benefits Assurance Plc, a new generation insurance company would today start sourcing for fund from the capital market for this purpose.
Magnum Trust Bank on behalf of Mutual Benefits Assurance Plc would from October 18, 2004 offer 413,333,334 50 kobo ordinary shares at 75 kobo each to existing shareholders in a right issue that will last till November 24, 2004. The company also expressed optimism over the success of the shares offer.
The board of the company at the Completion Board Meeting of the company in Lagos last week secured the approval of the company owners to raise the fund as stated above and for the said money to be utilised for expansion purposes.
The insurance company is expected to realise N310 million gross proceeds from the offer, which it intends to expend on expansion of its operations. The company disclosed that it will use the resources for its immediate future plans including greater participation in oil and gas risk underwriting, branch network expansion programme as well as becoming a major role player in life and pension insurance.
The Chairman of the company, Mr. Akin Opeodu, Chairman, who commented on the offer expressed optimisim on the success of the rights issue.
"We are very optimistic based on the performance of the company and what we perceive as the direction the market is going. There is absolutely no reason why the offer should not be taken up. Don't forget that this is a rights issue, we have sensitised the shareholders and they have indicated that they will, based on our track record, take up more shares",he said.
Opeodu also explained why the company had to go for rights issue now saying, "from what we perceive this is the first step. Even in the banking industry when they came up with the N25 billion there is a lot of speculation and we know that sooner or later, it will get to the insurance industry".
"Anyway, there are already rumours about N1.5 billion but we want to give the current shareholders a chance to first have a taste and considering that the price at which we are going to the market but subsequently, we will invite other people to come in and join us when we do an offer for subscription", Opeodu added.
Meanwhile, the company posted N58.93 million profit after tax from its 2003 operation, a 68 percent increase over the N35.18 million recorded the previous year. It raked in N638.33 million gross premium written, a 73 percent increase over the N368.24 million recorded in 2002.
The profit before tax made by the company last year amounted to N75.25 million as against N42.49 million recorded the previous year, a 77 percent improvement in profit.
Also the company made N172.07 million from its various investments and accrued N268.28 million in insurance fund as at the end of last year as against N125.99 million recorded the previous year.
Its shareholders' fund also rose from N318.98 in million 2002 to N414.20 million while every 50 kobo ordinary share in the company earned 10 kobo last year.
The capital base of the company is presently N353 million and by the end of the rights issue, the capital of the company would have risen to N559.67 million paid-up.
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