Century Insurance Company Limited (PSX: CENI) has approved a rights issue of around Rs. 448 million to strengthen its capital base and working capital position and meet enhanced regulatory capital requirements.
According to a notice issued by the company, the board approved the issuance of 44.814 million ordinary shares at Rs. 10 per share, raising a total of Rs. 448.145 million.
The right shares will be offered to existing shareholders in proportion to their holdings, with shareholders entitled to approximately 81 right shares for every 100 ordinary shares held.
The company said the proceeds will primarily be used to strengthen its paid up capital and reserves, improve its working capital position and enhance its financial stability. The additional capital is also expected to support the company’s underwriting capacity and business growth.
Century Insurance said the stronger capital position will help it comply with enhanced paid up capital requirements prescribed by the Securities and Exchange Commission of Pakistan and support its ability to meet future growth and solvency requirements.
The company said the additional funds will also help strengthen its financial position, improve risk retention, support reinsurance arrangements and provide greater capacity to pursue new business opportunities.
The right issue is being offered at Rs. 10 per share, which the company said is below the prevailing market price. Shareholders who do not subscribe to their entitlement will be subject to dilution of their existing shareholding.
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