Century Insurance Company Limited (PSX: CENI) has approved a rights issue of around Rs. 448 million to increase its capital and strengthen its financial position.

The company’s board approved the issuance of 44.814 million ordinary shares at Rs. 10 per share, which will raise Rs. 448.145 million.

The new shares will be offered to existing shareholders according to their current holdings. Shareholders will be entitled to around 81 right shares for every 100 shares they own.

Century Insurance said the funds will be used mainly to increase paid-up capital and reserves, improve working capital and strengthen the company’s financial position.

The additional capital will also help the company increase its underwriting capacity and support future business growth.

The company said the rights issue will help it meet higher paid-up capital requirements set by the Securities and Exchange Commission of Pakistan (SECP) and maintain sufficient capital for future growth and solvency needs.

The funds are also expected to improve the company’s risk-retention capacity, support reinsurance arrangements and allow it to pursue more business opportunities.

The rights shares will be offered at Rs. 10 each, which is below the prevailing market price, according to the company. Shareholders who do not subscribe to their entitlement will see their existing ownership diluted.

The board has authorized management to complete the required regulatory and corporate procedures, including preparing and publishing the offer document for the rights issue.