Prima Reinsurance Plc has successfully listed 15 million additional shares following a Rights issue, according to a statement from the company.
“Shareholders of Prima Reinsurance Plc are referred to the Declaration Announcement published on Friday, 29 May 2020 and the Finalisation Announcement published on Friday, 5 June 2020 as well the Circular to Shareholders dated Monday, 22 June 2020 setting out details of the Prima Re Renounceable Rights Offer of 15,000,000 ordinary shares (the “Rights Offer”) which was underwritten by the Industrial Development Corporation (“IDC”)”, read a statement issued by Choice Corporate Services Limited on 23 July 2020 on behalf of the Board of Prima Re.
According to the prospectus, the Rights Offer “was structured on the basis of one (1) new ordinary share for every two (2) shares already held on the Record Date, Friday, 19 June 2020, at a subscription price of ZMW2.70 per new ordinary share”. This meant that existing shareholders got a 3.6% discount to purchase additional shares in the company. This, therefore, gives that existing shareholders securities rights which makes them privileged to purchase new shares at a discount to the market price on a stated future date.
The Rights Offer opened on Monday, 22 June 2020, and closed on Tuesday, 14 July 2020. Following the successful issue, the total number of shares now in issue for Prima Re following the Rights Offer is 45 million.
IDC was a key player in this particular Rights Issue as the underwriter. The role of the underwriter is to guarantee that the funds sought by the company will be raised. The agreement between the underwriter and the company is set out in a formal underwriting agreement which was signed between Prima Re and IDC. Following the rights issues, the shareholding of IDC in Prima Re is now 28.17 % after underwriting the Rights Offer.
The new Rights Offer Ordinary shares have been issued and listed on the Lusaka Securities Exchange (“LuSE”). This means that investors will see an upward movement in the number of Prima Re. shares available for trading.
The rights issue is part of Prima’s strategy of strengthening its balance sheet. “Prima Re is focused on growth for 2020 as well as strengthening its balance sheet through new investment opportunities so as to compete more favorably on the international platform within the African continent”, according to an extract from the company’s Managing Director Exhilda Lumbwe in their 2019 annual report.