Cote D’Ivoire firm acquires 28.2% stake in Equity Assurance Nigeria
A leading Cote D’Ivoire’s insurance company, Sunu Assurances Vie Cote D’Ivorie has received the approval of the Nigerian Stock Exchange (NSE) to acquire 28.2 per cent equity stake in Equity Assurance Plc, in a deal valued at N1.25 billion.
Sunu Assurances would be acquiring a total of 2.497 billion ordinary shares of 50 kobo each of Equity Assurance Plc, representing 28.2 per cent of the equity stakes held by Skye Financial Services and other shareholders of Equity Assurance.
Equity Assurance, which is quoted on the insurance sector of the NSE, currently has total issued shares of 8.847 billion ordinary shares of 50 kobo each trading at its nominal value of 50 kobo, representing total market capitalisation of N4.42 billion.
Reliable market sources told The Nation the quotation committee of the council of the NSE approved the transaction.
Market analysts said the sustained depreciation of share prices of Nigerian quoted companies has made several companies targets of acquisitions. The low valuation is prominent in the insurance sector, where most companies are trading at their nominal value of 50 kobo.
Chairman, Equity Assurance Plc, Mr. Adetutu Buraimo, had hinted about the acquisition at the company’s 28th annual general meeting (AGM) in Ijebu-Ode, Ogun State.
According to him, the company plans to seek for new equity investments from strategic investors.
Shareholders passed a resolution to increase the company’s authorised share capital from N7 billion to N10 billion.
The acquisition comes on the heels of recent rebound in the performance of Equity Assurance, which recovered from a loss of N365 million in 2013 with a profit of N310 million in 2014.
He said the group recorded a total premium of N4.846 billion last year as against N4.616 billion in 2013 while the company’s solvency also improved as shareholders’ funds increased by four per cent to almost N4 billion.
He reiterated the commitment of the board to delivering return on investments to shareholders, adding that the company hopes to achieve this by driving market penetration and expanding its frontiers in retail.
“New products will be developed to serve the needs of the insuring public, while more electronic distribution channels are being opened up to make its products more accessible to prospective policy holders,” Buraimo said.
Equity Assurance was incorporated on December 13, 1984 and was licensed to underwrite all classes of general business. The company operates with a recently increased authorised share capital of N7 billion and shareholders fund of about N5.1 billion. The company is a corporate member of the West African Insurance Company Association (WAICA) and the Nigeria Insurers’ Association (NIA), the official umbrella of registered insurance companies in Nigeria and The Africa Insurance Organisation (AIO).
Equity Assurance Plc is the parent company of Equity Assurance Limited, a Ghanaian subsidiary that started operations in Ghana in 2008. Source: Nation Online