NIGERIA – A Federal High Court sitting in Lagos has approved the restructuring arrangement of Continental Reinsurance Plc following the approval of the company’s shareholders at a court ordered meeting in the last quarter of 2019.
A statement from Continental Re said by this approval, shareholders of the company were free to choose among the three options provided in the scheme, while the company promised to ensure that the concerns of all the parties were duly addressed.
The statement recalled that at the court ordered meeting of the company in October 29, 2019, over 90 per cent of the minority shareholders approved the restructuring plan proposed by the board of directors.
Speaking after the court’s approval of the arrangement, the Group Managing Director, Dr. Olufemi Oyetunji, stated that the restructuring was more about repositioning and achieving the best for the company.
Dr. Oyetunji said “Currently, Continental Re Nigeria has a B+ rating and we aim to attain an A rating by 2020,” he said.
According to him, current market trends show an increasing demand for A-rated reinsurers by primary insurers, particularly for speciality lines.
He explained that regulations in the industry continued to penalise primary insurers for reinsuring with B-rated companies, thereby, increasing demand for A-rated reinsurers.
Oyetunji said, “Our path to an ‘A’ rating requires us to overcome the challenges of Nigeria’s low sovereign credit rating and improve our level of capitalisation while enhancing our capabilities.
The company’s B+ rating is less favourable than other global reinsurers.”
As players in the global market continued to provide cheap and abundant capital to highly rated reinsurance companies, he said the improved ratings following the restructuring of Continental Re Nigeria would make the company more attractive to investors and increase its ability to raise capital at very competitive rates.
By the scheme, the shareholders could elect to take cash, have their shares transferred to Mauritius directly or keep their shares with the company through a nominee vehicle, the statement said.
Commenting on the reorganisation, the Chairman of the Company, Chief Ajibola Ogunshola, explained that it would create considerable benefits and opportunities for shareholders and other stakeholders.