Recapitalisation: Sovereign Trust Insurance Plans N5bn Capital Raise

Sovereign Trust Insurance Plc is set to raise fresh capital in the region of N5billion in a move to recapitalise before the deadline granted to underwriters to do so.

To this end, the firm has notified its shareholders and the investing public that its board of Directors, chaired by Abimbola Oguntunde, has approved an initial capital raise of N5 billion through a Rights Issue.

This represents a strategic first step in the Company’s phased recapitalisation agenda, undertaken in alignment with the requirements of the Nigerian Insurance Industry Reform Act (NIIRA) recently signed into law by President Bola Ahmed Tinubu.

The NIIRA framework mandates more substantial capital buffers and enhanced solvency positions across the insurance sector, reinforcing the need for proactive capital planning by responsible operators.

The Rights Issue is projected to be completed within the first quarter of 2026. In line with global best practices, the company has commenced structured engagements with all appointed professional parties, including issuing houses, legal advisors, and auditors, and is currently finalising the necessary regulatory approvals before the formal opening of the offer to shareholders.

At the company’s 30th annual general meeting held on 25 September 2025, shareholders approved a set of key resolutions designed to strengthen Sovereign Trust Insurance Plc’s strategic and financial position.

Foremost among these was the endorsement of a capital raise of up to N20 billion to reinforce the balance sheet, improve liquidity buffers, and expand underwriting capacity in line with the heightened capital expectations introduced under the NIIRA regime.

Shareholders also approved the payment of a five kobo dividend per share, affirming confidence in the company’s financial discipline and commitment to sustained value creation.

Commenting on this development, the managing director/chief executive officer, Olaotan Soyinka, reiterated management’s resolve to position the company among the top five insurers in Nigeria – a target aligned with industry benchmarks for operational efficiency, premium growth, and digital service delivery.

He encouraged shareholders to participate fully in the Rights Issue when it opens, noting that the company remains firmly committed to innovation, digital transformation, market agility, and underwriting excellence.

According to him, these pillars are critical for sustaining long-term performance, enhancing the customer experience, and consolidating the company’s position in a rapidly evolving insurance landscape.