Royal Exchange Seeks Fresh N2.7bn Equity To Meet Recapitalization

Royal Exchange Plc is seeking shareholder approval to raise up to N2.7bn in fresh equity capital through a public offer of 2.08 billion ordinary shares as part of recapitalisation programme aimed at strengthening its financial position and supporting strategic expansion plans.

The proposed capital raise will be considered at an Extraordinary General Meeting (EGM) where shareholders will vote on a series of resolutions, including an increase in the company’s share capital and the allotment of new shares to investors.

According to the notice of meeting issued by the company, Royal Exchange plans to raise the funds through the issuance of 2,076,923,077 ordinary shares of 50 kobo each at N1.30 per share, generating proceeds of up to N2.7bn, subject to regulatory approvals and market conditions.

The insurer said the additional capital would support its ongoing recapitalisation efforts and provide greater financial flexibility as it pursues growth opportunities within Nigeria’s insurance industry.

As part of the exercise, shareholders will also consider a proposal to increase the company’s issued share capital from N4.63bn to N5.17bn through the creation of 1.08 billion additional ordinary shares of 50 kobo each.

The new shares will rank pari passu with the company’s existing ordinary shares.

The board is seeking authority to undertake all actions required to execute the fundraising programme, including appointing professional advisers, securing regulatory approvals and executing transaction-related agreements.

It is also requesting approval to allot the newly created shares under the public offer at N1.30 per share or at such price as may be determined by the board.

The proposed increase in share capital is expected to provide sufficient headroom for the public offer and any additional equity transactions that may be undertaken under the company’s broader capital-raising programme.

In addition, shareholders will be asked to approve amendments to the company’s Memorandum and Articles of Association to reflect any changes in issued share capital resulting from the fundraising exercise.

The company secretary will be authorised to complete all necessary filings with the Corporate Affairs Commission and other regulatory authorities.

Beyond the capital raise, the meeting will also take note of the directors’ intention to acquire and recapitalise Royal Exchange Prudential Limited, a move that could strengthen the group’s position within the insurance and financial services sector.

The planned fundraising comes amid heightened capital strengthening efforts across Nigeria’s financial services industry, as companies seek to enhance solvency levels, improve competitiveness and position themselves for long-term growth.

If approved, the N2.7bn equity raise would represent one of the most significant capital market transactions undertaken by Royal Exchange in recent years and could provide the company with additional resources to support business expansion, operational efficiency and strategic investments.

The outcome of the meeting is expected to determine the next phase of Royal Exchange’s recapitalisation strategy as it seeks to reinforce its balance sheet and unlock new growth opportunities.