Lion of Africa Insurance Company Goes Public Soon
By Nnamdi Duru
Lion of Africa Insurance Company Limited, the 51 years old underwriting firm, has indicated its intention to go public through an initial public offer at a date yet to be announced by the company's Board of Directors.
The board secured the approval of owners of the company to this effect at the company's 51st Annual General Meeting in Lagos recently. It disclosed that in the initial public offer the company would be offering a billion shares through the Nigerian Stock Exchange (NSE).
The Chairman of the company, Alhaji Aliko Mohammed made these disclosure in an interview with newsmen in Lagos recently. He said that owners of the company has finally given their approval for the organisation to go public.
The board according to him would very soon formally apply to the NSE, which in turn would give its conditions and price of the company's shares for the initial public offer.
"We have just taken that decision now to go into the stock market. We are going to offer 1 billion shares. If you are going to the exchange, you cannot give a price, it is the exchange that will fix the price depending on how they value your company", he disclosed.
On the time the offer would be made to the public, Mohammed said, "you should ask the exchange, we are going to apply to them".
The Chairman of the company also gave an insight into how the company would utilise the proceeds of the offer.
He said, "first of all, it is very important, we have to increase the IT in our various companies and also we have branches all over the country. We will be able to be online with them. We also have to build some more buildings, we are also going into things like mortgage".
Mohammed also commented on the fears that the enhanced capitalised imposed on banks by the apex banking institution would rub off on insurance companies' capitalisation. He was of the opinion that N2 billion in share capital would be adequate for composite insurers.
He however, maintained that raising capitalisation of operators, particularly, in the insurance industry would only be necessary to the extent that it serves as a means of limiting the number of operators to a manageable size.
"I think N2 billion will be okay for composite insurance companies. It is my independent opinion because insurance companies do not require cash, they are the ones who will generate cash. The cash they require is only for their buildings and also IT.
"But to keep those who are not serious away, you can put the money high enough so that you can attract the few that are very serious to go into that", he explained.
He also expressed optimism that whatever the capitalisation required of insurance operators, Lion of Africa Insurance Company would meet it, saying, "we are hopeful about it, yes we can, when we go to the stock exchange".
|
