SEC okays National Re IPO

The Securities and Exchange Commission has approved the planned initial public offering (IPO) of National Reinsurance Corp. of the Philippines estimated to raise between P2.14 billion and P2.95 billion.

National Reinsurance is offering a total of 638 million common shares, accounting for 30.7 percent of its issued and outstanding capital stock, at a price ranging from P3.36 to P4.62 each share.

The company has set aside 103.9 million shares for the over-allotment option, exercisable within 30 days from the listing date.

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

As of Jan. 15, 2007, National Reinsurance had an authorized capital stock of P3 billion.

"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.

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 the year 2006, National Reinsurance generated P3.78 billion of gross premiums written and a net income of P274.9 million. As of the same period 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 are the Government Service Insurance System, the BPI Group and the Malayan Group.