LASACO gets CAC’s nod to increase Share Capital to 20bn Units
In line with the recapitalization plan, LASACO Assurance Plc has received approval from the Corporate Affairs Commission (CAC) to increase its Authorized Share Capital from 10 billion units to 20 billion units.
The Managing Director of the company, Mr. Segun Balogun, disclosed this in a media interview in Lagos recently.
He said the problem is not increasing the authorized share capital to accommodate the increase, but where to get the money, adding that the majority shareholders of the company are solidly in support of their recaplitalisation plans.
According to him, “We recently got approval from the Corporate Affairs Commission (CAC), saying that our authorised share capital has been increased from 10 billion units to 20 billion units.
“What this means is that we have almost 18 billion units of shares to issue. The challenge is not increasing the authorized share capital to accommodate the increase we want to do. The issue is where the money will come from.
“So, what we have done as a company because we have about 37,000 shareholders. Our top 50 shareholders control about 70 per cent of the shareholding and we have top 10 controlling almost 60 per cent. We have engaged these top 10 shareholders revealing our plan to them and they have given us permission to go ahead our plans promising to bring in money because we give them good dividend.
“For us at LASACO what we have done first is to reconstruct our shares. We currently have over seven billion units of shares that have been issued over 37,000 Nigerians at 50 kobo. So we agreed that to realise the recapitalisation plan, we will reconstruct the shares to the extent that the number of shares that have been issued becomes less. So instead of over 7 billion shares that has been issued, we want to reduce it to one-third of that which is about two billion plus. So we still have almost eight billion of shares unissued.
“The implication of reconstructing the shares, would mean that if you have one unit of shares of LASACO, instead of the one unit being valued at 30 kobo or 40 kobo, it means one unit of shares of LASACO will now be that amount multiplied by three. At the par value, 50 kobo multiplied by 3 is N1.50 kobo for one unit of shares. At the price of 30 kobo which it is currently trading, the value of share of LASACO is now 90 kobo.
“What this means for investors is greater returns because instead of you getting dividend of 3 kobo like we paid in 2017, or the 4 kobo we paid in 2018, it then means that what we will pay would be more significant. Instead of paying 3 kobo, it will be 9 kobo, instead of 4 kobo, it will be 12 kobo and this will be more meaningful.
