The insurance industry’s watchdog has approved investment bank Norrenberger Advisory Partners Limited’s bid to buy International Energy Insurance (IEI), which has been losing money for years, the underwriter said Wednesday.
The transaction represents the first takeover bid in the insurance sector this year, coming just one week after Titan Trust Bank announced its intention to take control of Union Bank by purchasing an 89.4 percent stake in the 107-year-old lender.
The firm has come under regulatory pressure to meet the preconditions of the current recapitalisation round in the insurance sector, according to a regulatory filing at the Nigerian Exchange, and has so “sought and obtained the No Objection approval of NAICOM (National Insurance Commission) for the acquisition of 100 per cent equity of the company by Norrenberger…”
Lagos-quoted IEI has been racking up losses since 2012 and is now battling the failure to thrive in the midst of overwhelming operational costs, particularly underwriting expenses incurred from underwriting risks.
It started operations in Nigeria more than half a century ago in 1969 as the country’s first energy-focused insurer focusing on offshore and onshore risks alongside general insurance services.
Tony Edeh, group managing director/CEO Norrenberger Advisory Partners
In 2007, IEI raised around N7.7 billion by way of private placement from investors but has been perennially incapable of delivering cash rewards to shareholders, having failed to pay dividends since 2012.
Norrenberger, whose offerings also encompass brokerage and asset management, will be looking to turn around the fortune of a company, whose shares have only traded seven times since August 2018 and have not recorded any price movement since that time on account of investors’ apathy.
“… the acquirer (Norrenberger) has commenced the process of obtaining the approvals of the Federal Competition and Consumer Protection Commission (FCCPC) and the Securities and Exchange Commission (SEC) for the acquisition of 50.62 per cent from the key shareholders,” the document said.
That is coming after Norrenberger’s share purchase pact with IEI’s key shareholders.
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