Investment bank Norrenberger Advisory Partners Limited won insurance watchdog approval for its offer to buy International Energy Insurance (IEI), which has seen a period of losses for years, the insurer said on Wednesday.
The transaction marks the first take-over bid in the insurance sector this year, a week after Titan Trust Bank is committed take control of Union Bank by purchasing an 89.4 percent stake in the 107-year lender.
The company has come under regulatory pressure to meet the preconditions of the ongoing recapitalization cycle in the insurance sector, according to a regulatory filing with the Nigerian Stock Exchange, and has thus “sought and obtained the no-objection approval of the NAICOM (National Insurance Commission) for the acquisition of 100 per cent of the company’s capital by Norrenberger… ”
Lagos-city IEI has been racking up losses since 2012 and is now battling failure to grow amid crushing operational costs, especially underwriting expenses incurred for underwriting risks.
It began operations in Nigeria over half a century ago in 1969 as the country’s leading energy-focused insurer, focusing on offshore and onshore risks alongside general insurance services.
In 2007, IEI raised around 7.7 billion naira through private placement investors, but has consistently been unable to provide cash rewards to shareholders, not having paid dividends since 2012.
Norrenberger, whose offerings also encompass brokerage and asset management, will seek to turn around the fortunes of a company, whose shares have only traded seven times since August 2018 and have not seen any price movement since. then due to investor apathy.
“… the acquirer (Norrenberger) has started the process of obtaining approvals from the Federal Competition and Consumer Protection Commission (FCCPC) and the Securities and Exchange Commission (SEC) for the acquisition of 50.62% from the main shareholders, ”the document indicates. noted.
It comes after Norrenberger ‘share purchase agreement with the main shareholders of IEI.
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