WAICA Re to raise $25m fresh funds

WAICA Re, the West Africa reinsurance company, has commenced the process of raising fresh $25m to boost its working capital and ensure market expansion in line with its 2011-2015 business plan.

In a statement on Sunday, the firm said ESL Limited, a firm of financial advisers, had been appointed to drive the fundraiser that had commenced across major West African markets and targeting existing shareholders, as well as new investors from within the insurance and reinsurance sectors.

In the offer, which commenced in August, WAICA Re said it was offering 12.8 million subscriptions at $1.28 per share and a rights issue of 7.7 million subscriptions at $1.1 per share.

The statement said while the rights issue was taking 38 per cent of the offer, the balance of 62 per cent was targetted at new shareholders.

According to the offer prospectus accessed in Lagos, the transaction has been structured to provide existing shareholders an opportunity to maintain and possibly increase their interest and also invite new shareholders to participate in the emerging African success story.

The Managing Director, WAICA Re, Mr. Abiola Ekundayo, said the offer was to fully implement the company’s  2011-2015 business plan and strategy.

The statement said in 2011, the company engaged the services of a financial advisor to shop for $25m capital to enable it to meet its statutory capital requirements, cater for its working capital needs and broaden the shareholder base.

At the end of the exercise, WAICA Re raised $7m of the total requirement, forming the core start-up capital with which it had operated for almost 18 months.

According to the company, the post-offer additional capital may rise to $29m. This will include a $4m reserve standing in the name of WAICA Reinsurance Pool, the precursor to WAICA Re.

This reserve will be converted into additional shares for members of the pool, some of who, incidentally, are existing shareholders of WAICA Re.

WAICA Re was incorporated on March 7, 2011 as a limited company. It was formed out of a collaborative effort of WAICA, an association of West African insurance companies with a view to provide and enhance the reinsurance capacity of its members and the sun-regional insurance companies in general.

Though the association was formed in 1973, the project took off in 2011 with the seed capital from members of the association.

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