EIC shareholders call for restructuring (Graphic Business, Tuesday, August 17, 2010, pg 6)
SHAREHOLDERS of Enterprise Insurance Company have passed resolutions allowing for the restructuring of the company at an extraordinary general meeting held in Accra.
Under the agreed proposals, the EIC, the oldest insurance firm in Ghana, will become a subsidiary of a newly created holding company, to be named Enterprise Group Limited (EGL). EIC's subsidiaries, Enterprise Life Assurance Company Ltd (ELAC) and Consortium House Ltd (CHL) will also become independent subsidiaries of the group.
Shares held in EIC will be transferred to shares in EGL upon the launch of the new company. One share in EIC will become five shares of EGL, which will have a fifth of the value.
The proposed re-organisation of the company is to be effcted by a scheme of arrangement with court approval under section 231 of the Companies Code 1963 (Act 179).
The reasons given for the change in structure were that it would enable the group to position itself more effectively for emerging market opportunities in Ghana and across West Africa.
Specifically these included the newly discovered oil in Ghana, which would present investment opportunities in the near future, and the pursuit of new pension fund opportunities offered by the governments adoption of the current three-tier pension scheme.
It was also hoped that the restructuring would allow the group to take advantage of the expanding real estate market in the country. As an insurance company, EIC is limited by law to insurance related activities making the restructuring necessary to take advantage of these future markets.
The group also wants to broaden its regional presence, expanding links in The Gambia and Liberia as well as cultivating new relationships in Nigeria and Sierra Leone.
The Managing Director, Mr George Otoo expressed the hope that the new changes would allow the group to diversify its asset classes and therefore reduce the risk profile of the company.
He stated that although he expected little immediate benefit, the restructuring would position the company better “in the long term”.
Mr Otoo was confident that the changes would bring greater efficiency, as it would allow EIC to focus its efforts entirely on insurance trading, and lead to the development of “specific competencies that can drive profitability”. It would also offer greater opportunities to staff in the company, through diversified career options.
"EGL will not require a fresh injection of shareholder capital but will be formed using existing EIC assets and in the same way, the solvency of EIC and ELAC will not be impacted negatively."
The group also released a statement of its financial position together with forecasts. The forecast indicated a strong recovery up to 2011, with post tax profit rising to GH¢ 4,476m cedi, and then a consolidation in 2012.
In the transition, it is expected that the solvency of the company will drop from 2.33 to 2.1, still comfortably above the 1.5 required by law.
The EIC has grown substantially over the last 10 years from an asset base of GH¢ 2.5 million in 2000 to GH¢ 35 million in 2010.
Trading of shares in EGL on the GSE is expected to commence on September 30, 2010.
Under the agreed proposals, the EIC, the oldest insurance firm in Ghana, will become a subsidiary of a newly created holding company, to be named Enterprise Group Limited (EGL). EIC's subsidiaries, Enterprise Life Assurance Company Ltd (ELAC) and Consortium House Ltd (CHL) will also become independent subsidiaries of the group.
Shares held in EIC will be transferred to shares in EGL upon the launch of the new company. One share in EIC will become five shares of EGL, which will have a fifth of the value.
The proposed re-organisation of the company is to be effcted by a scheme of arrangement with court approval under section 231 of the Companies Code 1963 (Act 179).
The reasons given for the change in structure were that it would enable the group to position itself more effectively for emerging market opportunities in Ghana and across West Africa.
Specifically these included the newly discovered oil in Ghana, which would present investment opportunities in the near future, and the pursuit of new pension fund opportunities offered by the governments adoption of the current three-tier pension scheme.
It was also hoped that the restructuring would allow the group to take advantage of the expanding real estate market in the country. As an insurance company, EIC is limited by law to insurance related activities making the restructuring necessary to take advantage of these future markets.
The group also wants to broaden its regional presence, expanding links in The Gambia and Liberia as well as cultivating new relationships in Nigeria and Sierra Leone.
The Managing Director, Mr George Otoo expressed the hope that the new changes would allow the group to diversify its asset classes and therefore reduce the risk profile of the company.
He stated that although he expected little immediate benefit, the restructuring would position the company better “in the long term”.
Mr Otoo was confident that the changes would bring greater efficiency, as it would allow EIC to focus its efforts entirely on insurance trading, and lead to the development of “specific competencies that can drive profitability”. It would also offer greater opportunities to staff in the company, through diversified career options.
"EGL will not require a fresh injection of shareholder capital but will be formed using existing EIC assets and in the same way, the solvency of EIC and ELAC will not be impacted negatively."
The group also released a statement of its financial position together with forecasts. The forecast indicated a strong recovery up to 2011, with post tax profit rising to GH¢ 4,476m cedi, and then a consolidation in 2012.
In the transition, it is expected that the solvency of the company will drop from 2.33 to 2.1, still comfortably above the 1.5 required by law.
The EIC has grown substantially over the last 10 years from an asset base of GH¢ 2.5 million in 2000 to GH¢ 35 million in 2010.
Trading of shares in EGL on the GSE is expected to commence on September 30, 2010.
Comments
Post a Comment