NEM Insurance Plc distributes 4.7 billion bonus shares worth N2.36 billion

NEM Insurance Plc has announced the distribution of bonus shares of 4.7 billion at N0.50k worth N2.36 billion.

By Chidi Emenike

The Management of NEM Insurance Plc has announced the distribution of bonus shares of 4.7 billion at N0.50k worth N2.36 billion.

The disclosure is part of the resolutions passed at the Extra-Ordinary General Meeting of the firm, which was sent to the Nigerian Stock Exchange market, and seen by Nairametrics.

Nairametrics gathered that the bonus shares will be issued to existing members of the Company, subject to the filing of the increase in Authorized Share Capital of the Company at the Corporate Affairs Commission, as approved at the AGM held on 18th of June 2020.

• According to the notice, the 4.7 billion ordinary shares of N0.50k will be distributed among members, whose names are found in the Company’s Register at the close of business on 16th of December, 2020, in the proportion of nine (9) new shares of 50 kobo each for every ten (10) existing shares of 50 kobo each, held by them.
• The shares distributed shall rank pari pasu with the existing shares in all respect and will be treated for all purposes as capital and not as income

The breakdown on how the bonus share was arrived at, showed that the total sum of N2,359,748,543.5 (approximately N2.36 billion) was transferred from the company’s share premium account and retained earnings account to the share capital account, wherein the bonus shares (fully paid) will be distributed from. The breakdown of individual contribution shows that;

• N2,087,197,543 was distributed from the firm’s retained earnings account
• N272, 551,000 was distributed from the firm’s share premium account.

What you should know

• Nairametrics had earlier reported a 482% increase revenue projection by NEM Insurance Plc for Q1 2021.
• Nairametrics gathered that the register of members and transfer books of the company will be closed from 17th-18th of December, 2020. In accordance to this, bonus shares will be distributed to shareholders whose names are on the register before the date of closure.
• According to Investopedia, a bonus share, also known as a scrip issue or a capitalization issue is an offer of free additional shares to existing shareholders. Shareholders can sell their shares to meet their liquidity needs. In addition, Bonus shares increase a company’s share capital but not its net assets.