The application for the N2 billion right issue of Mutual Benefit Assurance Plc that opened on Monday August 6, 2018 closed at the weekend.
Recall that the management of Mutual Benefit Assurance recently opened four billion ordinary shares of 50k each to the existing shareholders at 50k/share. According to the offer document, the right was allotted on the basis of one (1) new ordinary share of 50k each for every two ordinary shares held by existing investors as at the close of business on Wednesday, November 1st, 2017.
According to the insurance firms management/board, the net proceeds of the right would be used to deepen the capital base of the company and hence, enhance its ability to create more shareholders’ wealth. The insurance firm’s Chairman, Dr. Akin Ogunbiyi had said the net proceed from the rights issue would be used to finance the company’s growth plan, plus provision of additional working capital and expansion of information and communication technologies.
Tradelines believes that the offer came at the right time as it will increase the company’s capacity and strengthen it against the ongoing proposed recapitalization process in the insurance industry. We are also of the opinion that opportunities currently abound in the insurance business given the tight regulating system in the various sectors of the economy.