Aug 13 (Lagos) - Mutual Benefits Assurance Nigeria Plc (
MBENEFIT ) is offering 4 billion units at 50 kobo per unit in a rights issue.
This is a result of the NAICOM regulation that will divide Insurance Companies in Nigeria into 3 tiers. So Companies which wish to operate in the top tier will have to increase their capital adequacy ratios.
This company already has 8 billion shares outstanding. Adding another 4 billion units will ensure that the earnings per share does not go up for a long time given the current rate of growth.
Shares of
MBENEFIT currently trade at 30 kobo per unit which is sharply below the 50 kobo par value on which the Company is issuing new shares.
Wonder which investors are willing to invest in such Companies that have never delivered and are yet asking them for more funds.
We should expect many more rights issues from Insurance Companies in coming months.
reporting for easykobo.com on Monday, Aug 13 2018 from Lagos, Nigeria