By Ikechukwu Emelike

Standard Alliance insurance plc have commenced its hybrid offer of 4.75 billion ordinary shares of 50 kobo each at N3.95 kobo per share. The offer opened on Friday 14th of March and is to close on Monday March 31st 2008. Its lead issuing houses include Vetiva Capital Management Limited while joint issuing houses include Diamond Bank plc, First Inland Bank plc, Greenwich Trust Limited, Lead capital Limited, Sky Bank plc and Spring Capital Markets Limited.

According to the prospectus the purpose of the offer is a further step in the companys drive towards achieving its strategic objective of becoming a one stop non- bank financial services provider. It is worthy to note that the N18 billion hybrid offer is the biggest public offering by an insurance company.

The chairman of the company Aliyu Yinusa Sa’ad pointed out that the monies realised from the public offering would be directed towards underpinning its growth and development objectives through branch network expansion and upgrade of information technology infrastructure.
It is also meant to strengthen its capital base as well as exploiting and profiting from emerging opportunities within the Nigerian financial services industry.

About N5.03 billion equal to 27.89 percent of the offer proceeds would be channelled into working capital, while 21 percent equal to N3.79 billion would be utilised on asset management. Properties and life insurance will take each N2.85 billion equal to 15 percent, while Mortgage, pension administration, information technology and strategic retail business, will engulf the remaining balance of 10.53 percent, 5.26 percent, 2.63 percent and 1.05 percent respectively.

According to financial statements showing the perfomance of the company, as at June 30 2007, it recorded a premium income of N1.311billion, while its profit before tax stood at N294 million and the profit after tax N184.34 million.In 2006, the company posted a premium income NI.75 billion as against N1.316 at the same period in 2005. Its profit after tax at the end 2006 financial year stood at N179 million as against N164 in 2005.

If the offer turns out successfull, its market capitalisation post offer would hit N33.153 billion .
Based on expectation from the offer, the company’s forecast statistics show a projection of N8.619 billion in 2008, N13.318 billion in 2009 and N20.374 billion.

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