Grupo Security's Board Agrees to Issue 377,741,395 Shares As Part of Capital Increase Approved by Shareholders
The funds raised will be used to partially finance the purchase of the Cruz del Sur companies.
In an extraordinary meeting held April 8, the Board of Directors of Grupo Security agreed to issue 377,741,395 new shares as part of the capital increase approved by shareholders at an extraordinary shareholders’ meeting. The resources obtained will be used to partially finance the acquisition of the Cruz del Sur companies. The entity also indicated that its majority shareholders have agreed to subscribe all of their rights during the preferential option period.
The acquisition of the Cruz del Sur companies will position Grupo Security as the fourth largest market player in asset management (mutual funds and stock brokerage) and in third place by direct premiums in the non-retirement insurance market.
At the extraordinary shareholders' meeting held April 8, shareholders authorized the board to place up to 500 million shares in one or more phases within a term of three years. The shareholders also authorized the board to set the placement price for these shares.
This is the eighth capital increase carried out by Grupo Security. The chairman of the board, Francisco Silva, commented, “Our shareholders have supported all of the projects that we have proposed. This time, we are aiming to strengthen our market share in insurance and asset management and to diversify our revenue sources.”
Along with the issued capital, Security will issue UF 3 million in debt on the local market to finance the remainder of the transaction. Grupo Security's CEO, Renato Peñafiel, remarked, “This debt issuance fits the profile that we have always been known for in financing long-term operations.” He also said, “In addition to strengthening our competitive position, this acquisition will enable us to expand our product and service offering for customers of Security and Cruz del Sur companies, while maintaining the high standards of quality service for which both companies are recognized. We will also attain cost synergies and diversify our revenue sources by increasing the contribution from the insurance and asset management subsidiaries. As with past capital increases, we hope to see a rise in earnings per share, reflecting an increase in Grupo Security's equity value as a result of this transaction.