Universal Insurance Plc has secured a N7.128 billion equity investment from FPNG Co-Nvest Limited as the insurer works to strengthen its capital position and meet regulatory requirements under Nigeria's ongoing insurance industry recapitalisation exercise.
The company disclosed the investment in a market update filed with the Nigerian Exchange Limited (NGX) on Friday, following a request from NGX Regulation Limited for clarification on its recapitalisation status. Under a binding investment agreement, FPNG will provide the N7.128 billion through a private placement in exchange for additional shares in Universal Insurance.
Once completed, the transaction will give FPNG a 50.1 per cent stake in the insurer, making it the company's controlling shareholder. Universal Insurance said its board and management are engaging with the National Insurance Commission (NAICOM) and other relevant regulators to obtain the approvals required to complete the transaction.
According to the insurer, the proposed investment will allow it to exceed the applicable regulatory capital requirement while maintaining a strong solvency position. The company said it has already obtained the necessary board and shareholder approvals for the transaction but remains subject to regulatory conditions before completion.
Universal Insurance added that it would continue working with NAICOM on the remaining steps and provide shareholders and the investing public with updates on material developments.
The investment comes as Nigerian insurance companies work to strengthen their capital bases under the industry's ongoing recapitalisation programme. The exercise has prompted insurers to explore various options, including new equity investments, private placements, rights issues and other capital raising measures to meet regulatory requirements.
For Universal Insurance, the proposed N7.128 billion investment would provide a significant increase in capital and introduce FPNG as a majority shareholder if the transaction receives the required regulatory clearance.
The completion of the deal will therefore depend on the fulfilment of the outstanding regulatory conditions.
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