LASACO raises ₦19.3bn in oversubscribed rights issue

LASACO Assurance Plc successfully raised ₦19.3 billion through an oversubscribed rights issue, allowing it to clear NAICOM’s mandatory recapitalisation thresholds and boost its underwriting capacity.

LASACO Assurance Plc successfully raised ₦19.3 billion through an oversubscribed rights issue exercise. The successful capital injection allows the insurer to clear NAICOM’s mandatory recapitalisation thresholds, boosting its underwriting capacity for major commercial risk assets.

The oversubscription of the rights issue is a sign of investor confidence in LASACO Assurance’s future. The company has been working to meet NAICOM’s recapitalisation requirements, and the successful capital injection will strengthen its balance sheet. The increased underwriting capacity will allow LASACO to take on larger commercial risk assets.

This echoes the 2020 rights issue by other insurance companies, which also sought to meet recapitalisation requirements. The mechanism then was different, but the result was the same: a stronger insurance sector.

The winners: LASACO Assurance, which has strengthened its balance sheet; and the Nigerian insurance sector, which gains a stronger player. The losers: the shareholders who did not participate in the rights issue; and the Nigerian public, who must hope that the stronger sector translates into better services.

Bottom Line: LASACO has raised ₦19.3 billion through a rights issue. The company has met NAICOM’s requirements. The question is whether the strengthened balance sheet will translate into better services for customers.