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Aiico, IFC in N3.4b convertible loan deal

Published by The Nation on Mon, 26 Jan 2015


Aiico Insurance Plc and the International Finance Corporation (IFC) have opened discussions on a $20 million convertible loan deal that may see the global finance company holding substantial equity stake in the Nigeria-listed insurance company.Regulatory filing obtained at the weekend indicated that the IFC, the private sector arm of the World Bank, plans to extend $20 million, about N3.4 billion to Aiico Insurance.Under the arrangement, IFC has an option to convert any unpaid part of the convertible loan to equities in Aiico, referencing similar strategy that has seen IFC acquiring major stakes in many Nigerian financial institutions.Aiicos share price rose by 4.0 per cent at the weekend to open today at 78 kobo. At current market valuation, the convertible loan deal could see IFC holding as much as one third of Aiicos shareholding. Aiicos issued share capital of 8.80 billion ordinary shares of 50 kobo each is valued at N6.86 billion.IFC had made similar arrangement to invest $12.5 million in Custodian and Allied Insurance Plc in 2012. The Custodian deal came through a 4.5 per cent convertible loan stock, an approximately N1.95 billion deal that allowed IFC to convert the debt stock into equities upon the terms of the agreement.IFC recently acquired additional 4.6 per cent equity stake in Ecobank Transnational Incorporated (ETI) Plc, the financial services holding group for all Ecobank banks, including Ecobank Nigeria Limited.ETI, which is listed on the Nigerian Stock Exchange (NSE), Ghana Stock Exchange (GSE) and the BRVM, Abidjan, issued more than 838.32 million ordinary shares of 50 kobo each to IFC, through convertible loan deals involving two funds being managed by the corporation.A document submitted to the NSE indicated that IFC acquired the shares through its managed funds-IFC ALAC Holding Company II and the IFC Capitalization (Equity) Fund LP.Under the deals, both funds converted convertible debts earlier granted to ETI to shares, with effect from July 1, 2014. The outstanding convertible loans of about $56.39 million for the IFC Capitalization (Equity) Fund LP and $18.10 million for the IFC ALAC Holding Company II were converted to some 628.74 million and 209.58 million ordinary shares of ETI respectively.Consequently, ETI issued 838.32 million additional shares, increasing its outstanding shares by 4.9 per cent from 17.21 billion ordinary shares of 50 kobo each to 18.05 billion ordinary shares of 50 kobo each. The conversions automatically reduced ETIs convertible debts by $75.180 million.It should be recalled that IFC had in 2012, through these two managed funds and another fund-Africa Capitalisation Fund Limited, acquired 8.63 per cent equity stake in ETI. It had acquired 1.25 billion ordinary shares at agreed price of 8.0 cents per share, totaling $100 million, about N15.6 billion. ETI then had 13.24 billion ordinary shares outstanding. The supplementary listing of the additional shares issued to IFC increased total outstanding shares to 14.49 billion shares, giving IFC 8.63 per cent post listing.The post Aiico, IFC in N3.4b convertible loan deal appeared first on The Nation.]]>
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