Guinea Insurance Launches N5.82bn Rights Issue Amid Losses

Guinea Insurance Plc is set to launch a N5.82 billion rights issue, allowing existing shareholders to purchase additional shares at a discount price from March 25 to May 1, 2026. The structure of the offer is two new shares for every three held, resulting in the issuance of 5.30 billion new shares at N1.10 per share, increasing the total shares outstanding from 7.94 billion to 13.24 billion.

However, this capital raise occurs during a period of weakened earnings and rising operational costs, leading to concerns regarding shareholder value. The company's profit after tax has been volatile, with losses of N36 million in 2021 and N83 million in 2022, followed by a recovery to N478 million in 2023, peaking at N937 million in 2024 before falling sharply to N353 million in 2025.

The cumulative profit over five years is significantly lower than the amount being raised. Operational expenses have risen sharply, outpacing revenue growth, which raises questions about the company's financial health and the effectiveness of the rights issue in improving its situation.