HNB Assurance in rights issue

Harshini Perera

HNB Assurance Plc has decided to go for a Rights Issue of 6.25 million ordinary shares, a Colombo Stock Exchange (CSE) filing said. HNB Assurance Plc issued 37.5 million shares to public initially and in addition to that 6.25 million shares through capitalization of reserves issued earlier with which it amounted to 43.75 million shares.

With current 6.25 million shares rights issue, HNB Assurance shares will amount to 50 million shares, HNB Assurance, Managing Director Manjula de Silva said.

HNB Assurance going in line with the Insurance Board of Sri Lanka’s minimum capital requirement of Rs one billion, has decided to go for a Rights Issue. The regulatory body of insurance companies has requested to have at least Rs 500 million per a line of business. Accordingly a share will be issued at Rs 62.50 which will trade from April 27.

“HNB Assurance Plc has considered this the right time to comply with regulatory requirement as the market is growing at a steady pace. We are assured with the higher future gains and thought it is timely to upgrade the system, expand the branch network and to build the image of the company,” he said.

During the last ten years HNB Assurance Plc has outperformed the CSE indices with considerable margins. “We are confident that the public responce will be good at the Rights Issue,” de Silva said.

The company has seen a lot of potential in the market. New products will be introduced for the life insurance segment as the product expansion plan while there will be a re-branding of HNB general insurance segment with the capital raised.