By NKIRUKA NNOROM
Shareholders of Lasaco Assurance Plc have advised the underwriting firm against merging its business with another company, urging it to instead undertake a rights issue.
A cross section of shareholders who spoke at the 32nd annual general meeting in Lagos while reacting to the company’s announcement that it planned to form business combination with another insurance company with a view to boosting its share capital, said that such move does hold much promise to stakeholders.
Speaking, Chief Timothy Adesiyan, President, Nigeria Shareholders Solidarity Association (NSSA), urged the company to do everything within its power to either recapitalise or acquire another insurance firm to keep its integrity intact.
“At worst, we will request private investors to come in instead of merging. If we are merging for the purpose of boosting our business, we will say go ahead, but if it is for the purpose of beefing up our capital, I advise that we go for rights issue,” he said.
While assuring that shareholders would take advantage of the rights issue if put together by the company, Adesiyan urged the board to consider paying dividend in 2013, saying that they have not been paid dividend since five years ago.
“In as much as business combination looks attractive, I don’t think it is the solution; capital injection holds the answer. If you are afraid of doing rights issue, you can do convertible shares,” added Mr. Nona Awoh, another shareholders.
Responding, the chairman, Chief Edward Leigh, said that the arrangement was not conclusive, noting that the board will later chose from a number of options available.
He said that the board is working round the clock to ensure that it delivers robust returns to shareholders in the coming years.
He noted that year-on-year, the gross premium grew by 32 percent to N2.7 billion from N2.1 billion in the comparable period of 2010.
He explained that despite the prevalent insecurity and instability in some parts of the country and the impact of a tough economy, the company was able to post 24 percent increase in premium earned which stood at N2.1 billion as against N1.2 billion in 2010.
“Our profit after tax for 2011 was N213 million as against N249 million in 2010 which had a lower earned premium, reflecting the impact of lower-than-planned investment and other income and general unfavourable business environment,” he stated.
He assured that Lasaco will continue to look inward for the needed strength to achieve its set goals, adding that the company’s firm resolution towards remaining the preferred choice in insurance services is anchored on a well motivated staff.