NEM Insurance Raises N2.78 Billion On VFD Capital Offloading 30% Stakes

VFD Capital has sold off a substantial amount of stakes in NEM Insurance.  The firm joins a string of other investors led by Eaton Acquisition Limited and Three Seas Investment that have also severed ties with the company on offloading stakes.

NEM Insurance Stakes Sell

The firms appear to have made significant returns from their stakes, which they have been building in the last few years.  Prior to the sell-off, the firms had petitioned the Nigerian Stock Exchange, accusing NEM Insurance of failing to notify them of a protracted Annual General meeting in accordance with regulations.

Fillings indicate that the VFD Group, which was one of the largest investors in NEM Insurance, offloaded as much as N1.6 billion shareholding as part of the divestment. The sell-off came amidst disagreement over the strategic direction of the company.

VFD Group in a statement says it had lengthy discussions with NEM Insurance board about the direction the company ought to follow, to generate maximum value. However, they could not reach an agreement.

“However, as we could not agree on the modalities for working together in pursuing this vision, we recently reached an amicable understanding and have thus decided to exit our investment in this great company,” VFD Group in a statement.

VFD Capital offloaded its stake in NEM Insurance as it sought to raise additional capital for financing new opportunities in the financial space. The company is reportedly planning to Invest in a national bank located in the southwestern part of the country.

NEM N2.78 Billion Raise

In response to the share sale, NEM Insurance has already sold 1.6 billion ordinary shares representing 30% of the total shares issued to new shareholders.  In a statement the firm says, the sell-off took place late last year at a significant premium to the closing price on the floor.

In addition to the share sale, NEM Insurance balance sheet has also received a significant boost on the company raising N2.78 billion, from rights issuance and private placement. The company had initially planned to raise N1 billion via the rights offering. The over-subscription attests to growing investors’ confidence about the company’s long-term prospects.

Some of the new firms that have invested in NEM Insurance are betting big on the company’s strategic vision. The company is currently operating under new management and board that appear to have reinvigorated investors’ confidence in all the organs of the governance structure.