Cameroon’s Chanas Assurances plans to more than double its share capital to CFA13.27 billion, but only CFA3.33 billion of the restructuring will come from a cash share issue, with most of the increase relying on reserves already held within the insurer’s equity.
The restructuring, approved by an extraordinary general meeting in Douala on April 14, 2026, would raise share capital from CFA6.051116 billion to CFA13.2733 billion, a net increase of 119.35%. Details were published in a shareholder notice on August 10.
The transaction will take place in three stages. Chanas will first reduce its capital by CFA1.451116 billion to CFA4.6 billion. The notice says the reduction was approved “in accordance with CIMA requirements” but does not specify its accounting treatment or the financial factors behind it.
The company will then carry out a CFA3.326 billion cash capital increase by issuing 33,260 new shares with a nominal value of CFA100,000 each. That will bring its capital to CFA7.926 billion.
Chanas will then capitalize CFA5.3473 billion of reserves and distribute bonus shares to existing shareholders, taking final share capital to CFA13.2733 billion.
From the initial to the final level, the net increase will amount to CFA7.222184 billion. After the initial reduction, however, the two capital increases total CFA8.6733 billion: CFA3.326 billion in cash and CFA5.3473 billion through the capitalization of reserves.
The reserve component accounts for 61.65% of the two gross increases but will not generate new cash. It simply reclassifies resources already recorded within the insurer’s equity as share capital.
Actual Cash Proceeds Remain Uncertain
The CFA3.326 billion represents the nominal value of the cash share issue, not money already raised.
Existing shareholders will be able to subscribe without an issuance premium to the extent necessary to maintain their stakes. Once those preemptive rights have been exercised, any remaining shares may be offered to existing shareholders or new investors at a premium set by the board.
If residual shares are sold at a premium, the actual amount raised could therefore exceed CFA3.326 billion without increasing share capital by the same amount. The premium would instead be recorded separately within equity. Conversely, the notice does not yet establish how much will ultimately be subscribed and paid.
Chanas has given shareholders 30 days from publication of the notice to exercise their preemptive rights. The document calls for 50% of the subscription amount to be paid upfront, with the balance due within three months.
That provision requires clarification. CIMA Regulation No. 004 of August 8, 2024, which revised Article 329-3 of the Insurance Code, requires each shareholder to pay at least three-quarters of the value of cash shares subscribed in a capital increase.
The notice says the capital reduction and increase received the necessary approvals and favorable opinions from Cameroon’s finance minister, but it does not explain how the initial 50% payment will comply with the 75% minimum. An additional payment before the capital increase becomes legally effective could address the discrepancy, but no such timetable is provided.
New Equity Floor Rises to CFA10.62 Billion
Chanas operates in the property and casualty insurance market. Since CIMA Regulation No. 004/2024, minimum share capital for this category has been set at CFA5 billion.
Because Chanas already had CFA6.051116 billion in capital before the transaction, the restructuring cannot be viewed simply as an effort to meet that minimum, even though the CIMA Council of Ministers has extended the deadline for the second phase of compliance to December 31, 2027, for companies still affected.
More significantly, the 2024 regulation changed the minimum equity requirement. Previously, equity could not fall below 80% of the regulatory minimum share capital. It must now remain at or above 80% of a company’s actual registered share capital.
With Chanas’ capital at CFA13.2733 billion, that threshold would rise mathematically to CFA10.61864 billion, from CFA4.8408928 billion based on its initial capital.
The planned capital increase therefore has direct prudential implications. Capitalizing reserves raises registered share capital without bringing in new resources and, by itself, does not increase total equity.
Chanas’ ability to meet the new threshold will consequently depend on its actual equity after the transaction, the cash ultimately paid by subscribers and any other profits or losses. The notice provides no figures for eligible equity, solvency margins or the coverage of regulatory commitments, making it impossible to determine the insurer’s final prudential position from the document alone.
SNH Would Need About CFA1.5 Billion to Avoid Dilution
Cameroon’s National Hydrocarbons Corporation (SNH) says it owns 45.26% of Chanas Assurances. To theoretically maintain that stake through the cash capital increase, it would need to subscribe about CFA1.505 billion in nominal value, equivalent to 45.26% of the CFA3.326 billion issue, subject to allocation rules and rounding.
If SNH or other shareholders do not exercise their rights in full, remaining shares could be allocated to other investors. The subsequent capitalization of reserves, through bonus shares distributed to shareholders then on the register, should in principle preserve the ownership structure resulting from the cash issue.
The cash subscription stage is therefore where any significant change in Chanas’ shareholder structure is most likely to occur.
The shareholder notice also contains another apparent regulatory discrepancy. It refers to prior authorization for stakes reaching 20%, 30% or 50% and cites Article 329-3 of the CIMA Code.
However, Article 329-7 as published by CIMA sets thresholds at 20%, 33% and 50%, as well as the acquisition of a majority of voting rights. It also requires notification to the Regional Insurance Control Commission and the minister when a stake reaches 10%. The difference will need clarification if a major investor enters Chanas’ capital or increases an existing stake.
Chanas remains one of Cameroon’s three largest non-life insurers. According to provisional data attributed to ASAC, the company wrote CFA21.03 billion in premiums in 2024, behind SanlamAllianz and Axa.
If all stages are completed, Chanas’ share capital will be 2.19 times its current level. The economic significance of the restructuring, however, will depend less on the statutory CFA13.27 billion figure than on the amount shareholders actually pay, any issuance premiums collected, the insurer’s final equity position and whether SNH participates fully in the capital increase.
Baudouin Enama
