The Lagos State Government has agreed to inject the sum of N1bn into the Lagos Building Investment Company for it to meet the minimum capital required by the law to remain in operation as a primary mortgage bank.
The Managing Director and Chief Executive Officer, LBIC, Folasade Folivi, disclosed this to our correspondent on Friday during the company’s Annual General Meeting in Lagos.
She said the state government’s intervention was a lifesaver given that the share capital of the company had been eroded over the years to the extent that it was now below the minimum required by law for a primary mortgage bank.
Folivi said, “We realised that it would be insensitive for us to approach the shareholders to shore up the capital when there has been no returns on their investments since 2007.
“We, therefore, resolved to appeal to the major investor, the Lagos State Government, for a bailout. The government graciously agreed to inject the sum of N1bn for us to meet the minimum capital requirement and remain a going concern.”
Speaking earlier to investors and shareholders at the AGM, Folivi stated, “It is in the light of this and in line with the relevant provisions of the Investment and Securities Act, the Companies and Allied Matters Act and the Banks and Other Financial Institutions Act that we seek by this meeting to increase the authorised share capital of your company from three billion ordinary shares to four billion ordinary shares.”