UNIC INSURANCE PLC TO RAISE N2.2 BILLION FROM THE CAPITAL MARKET

UNIC Insurance Plc (“UNIC Insurance” held its Completion Board Meeting on Monday, 19th June 2006 to offer Two Billion Ordinary Shares of 50 Kobo each at N1.10 to the general public further to the receipt of regulatory approvals from the Securities & Exchange Commission and The Nigerian Stock Exchange. The Offer which is being handled by Vetiva Capital Management Limited is scheduled to open on Thursday 29 June, 2006.

UNIC Insurance Plc, one of the oldest insurance companies in Nigeria, was incorporated in 1965 and is currently licensed to underwrite both life and general insurance businesses. The company has recorded rate (CAGR) of about 45%.

Mrs. C. O. Osipitan, Managing Director, UNIC Insurance Plc noted at the meeting that “the capital raising exercise represents the first phase of the company’s articulated strategy towards building a world-class insurance company as well as complying with the NAICOM’s minimum capital requirements.”

The shares are being offered at a price of N1.10 which is a discount of 16% to its current market price of N1.31. In addition, the company’s PE ratio based on it offer price and latest full year audited accounts is 4.4x, this is low when compared to the insurance industry average of 14x. Thus, providing investors a strategic opportunity to invest in the undervalued stock of a well positioned insurance company.

Mrs. Osipitan further highlighted that UNIC Insurance welcomed the announcement in September, 2005 by the Finance Minister, Mrs. Okonjo-Iweala regarding the revision of the minimum capital base for all categories of insurers. This, she enthused was an opportunity that UNIC Insurance, was well prepared for as “we saw the development as imminent and necessary”. She recalled that in 2001, UNIC Insurance made a bold decision to plan for the future by refocusing towards becoming the preferred health insurer and shifting to a “Cash Basis” accounting method for premiums. This is practiced by only a few companies in the industry and ensures that post-consolidation, the company’s future income would not be affected by the industry wide challenge of unpaid premiums.

In addition, Mrs. Osipitan emphasized that the second phase of its strategy will involve acquiring or merging with one or more insurance companies who would strictly provide commercial value, thus, ensuring post consolidation shareholders value is retained and enhanced.

Mr. Chuka Eseka, Managing Director, Vetiva Capital Management Limited, the issuing house to the offer highlighted that “UNIC is strategically placed to take advantage of the arising robust opportunities in the industry. Vetiva’s research has estimated the industry size to be about N438 billion by 2010 with a CAGR of 25% over the next five to ten years.” In other words, Nigeria’s underwriting market will, considered on a per capita basis, be as large as India’s today. Accordingly, he encouraged investors to subscribe to the UNIC offer with a view to benefiting from the anticipated short and long-term returns from the Nigerian Insurance Industry.