National Reinsurance sets P2.95-B initial public offer

The National Reinsurance Corp. of the Philippines filed on Friday its registration statement with the Securities and Exchange Commission for its planned initial public offering (IPO) estimated to raise as much as P2.95 billion.

The offering involves a maximum of 638 million new common shares to be sold at a price ranging from P3.36 to P4.62 each share. The offer shares represent approximately 30.7 percent of National Reinsurance’s issued and outstanding capital stock of 2.08 billion common shares after the offer.

Proceeds from the IPO will be used to boost the company’s paid-up capital to allow it to increase its capacity to accept and retain premiums, and invest in various fixed-income securities.

"The increase in networth will enable the company to obtain an acceptable rating as a reinsurer which is an essential prerequisite to gaining entry into significant Asian reinsurance markets," National Reinsurance said in its filing.

BDO Capital & Investment Corp. has been tapped as lead underwriter for the offering.

The company has also set aside 103.9 million shares for the overallotment option.

From a meager paid up capital of P10 million and P20 million in gross written premiums in 1979, National Reinsurance has grown in a span of two decades to become the sole professional reinsurance company in the country following its merger with Universal Malayan Reinsurance Corp. on March 6, 2006.

Based on financial statements for 2006, National Reinsurance generated P3.78 billion of gross premiums written and a net income of P274.9 million. As of last year, the company had total assets of P9.12 billion and total shareholders’ equity of P3.83 billion.

The principal shareholders of National Reinsurance include the Government Service Insurance System, the BPI Group and the Malayan Group.