ROYAL Exchange plc has announced plans to list N3 billion bond on the Nigerian Stock Exchange, NSE, in October 2016.
The capital raise if success would position the 95-years old firm to play big and underwrite big ticket risks in the nation’s insurance industry.
A bond is a debt investment in which an investor loans money to an entity (typically corporate or governmental) which borrows the funds for a defined period of time at a variable or fixed interest rate. Bonds are used by companies, municipalities, states and sovereign governments to raise money and finance a variety of projects and activities
Auwalu Muktari, group managing director (GMD) of the Company made the disclosure during an official visit to the management of the NSE where he rang the closing gong.
Muktari said in line with ongoing reforms in the insurance industry particularly the Risk Based Supervion(RBS) requiring increased capital structure for bigger ticket risks, Royal Exchange was in line with this developing being proactive in readiness for higher responsibility.
“By October 2016 we want to play big in the Nigerian insurance industry and with need for more capital in the industry, we are restrategisinge to make sure that we have the required recapitalization to play bigger and take the opportunity in the insurance industry.”
“Besides that, the company is setting up a pension fund administration company, a PFA so that we tap into the opportunity of the annuity business.”
During the year 2015 we strategized to start doing annuity business under our life company. And we have a very good strategy of marketing the annuity businesses and we made an income of about N1 billion in 2015.
The annuity funds are there in our books and we are assuring our shareholders and the investors that as soon as we continue to grow our annuity funds the technical provisions made by the regulations will continue to show the sign of profitability. So we are working towards that. From the 2016 accounts you will see that we have returned to profitability”