Print. 
The AIICO Insurance 2.5 billion shares public offer is only 10 days to its closure date, meaning that, if you would like to invest, time is gradually ticking away. AIICO is aiming to raise a net sum of N5.28 billion from the sale of the shares at the offer price of N2.20 per 50k share. That price represents a 36% discount on the N3.43 market price of the stock.
The offer opened Monday December 10, 2007, closes December 31 and aims to have allotment certificates and transfers forwarded to subscribers by February 18, 2007. With 40% of the offer preferentially reserved for AIICO Bahamas, the company's foreign technical partner, the offer is already substantially taken up from the outset. Given that it is underwritten to the tune of 80% by Greenwich Trust Limited, as required under current regulation, it's success is assured. Such underwriting guarantees that the offer would be conclusive.
The AIICO offer is perhaps a precursor of what is to be expected from the insurance sector, in the coming months. Just as has continued with the banking sector, insurance companies that emerged from the re-capitalisation process are likely to seek to consolidate their financial base by embarking on further self-imposed fund-drive. Already. a few other insurers like Niger Insurance and NEM insurance have signaled their intention to approach the capital market for additional funds. Such funds will help them improve processes, expand spread, boost working capital and drive a new vision. For AIICO, about 38% of the net proceeds is targeted at branch expansion and upgrade. 42% (N2.2 billion) will meet working capital requirement, while another 20% (N1.06 billion) will provide resources for IT infrastructure development. These fund application details were disclosed by company chairman, Chief Dele Fajemirokun, at the completion biard meeting.
We have said elsewhere that insurance stocks offer an investment opportunity worth proper evaluation, at this time. The reason is simple: the sector is undergoing significant changes which are largely positive and portent better fortune for the industry. The prospects for the sector look good, though individual companies have to be assessed on their specific merit.
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