Royal Exchange Plc, a leading player in life assurance, health insurance, and credit financing, recently concluded its rights issue with a subscription rate of 75.83%, indicating a shortfall in investor uptake.
The rights issue aimed at raising capital through the issuance of additional ordinary shares saw only a portion of the offered shares subscribed by existing shareholders.
According to the weekly report of the Nigerian Exchange Limited, an additional 3,121,328,866 ordinary shares of 50 kobo each were listed on the market, resulting from the completion of Royal Exchange’s rights issue.
This falls short of the total intended issuance of 4,116,296,059 ordinary shares at a price of N0.50 per share.
Despite the lower-than-expected subscription rate, Royal Exchange remains optimistic about its future prospects.
The company’s unaudited 2023 report revealed significant growth in earned income, soaring by 253% to N882.32 million compared to the previous year.
This boost in earnings was attributed to increases in net interest income and profits from investments in associates, totaling N591.55 million.
Also, Royal Exchange reported a profit of N46.09 million for the year 2023, a stark turnaround from the loss of N150.47 million recorded in 2022.
The company’s restructuring efforts, with a focus on asset management, have contributed to its improved financial performance.
Despite the shortfall in its rights issue, Royal Exchange Plc remains committed to its growth trajectory, leveraging its strengthened financial position to capitalize on emerging opportunities in the insurance and financial services sectors.