Universal Insurance Plc’s N7.128bn recapitalisation has been thrown into uncertainty after the National Insurance Commission revoked the insurer’s operating licence and appointed a receiver/provisional liquidator over its failure to meet the regulatory minimum capital requirement.
The development creates a sharp contradiction in the insurer’s recapitalisation process. On 14 August, Universal Insurance disclosed to the Nigerian Exchange Limited that it had secured a N7.128bn equity investment from FPNG Co-Nvest Limited through a private placement, a transaction that would give FPNG a 50.1 per cent controlling stake in the company.
However, NAICOM’s action, which took effect on 19 August, followed the insurer’s failure to meet the prescribed Minimum Capital Requirement within the stipulated compliance period.
In its market disclosure, Universal Insurance said the investment was designed to strengthen its capital base, enable it to exceed the applicable regulatory threshold and maintain a strong solvency margin.
The company said its board and management were engaging NAICOM and other regulators to obtain the necessary approvals for the transaction. It also disclosed that the required board and shareholder approvals had already been secured.
