CI Leasing to convert $12.9 million loan from Abraaj to equity – Key lessons


CI leasing Plc has gotten approval from its shareholders to convert part of a $12.9 million Abraaj loan to equity. MD of the company, Mr Andrew Otike-Odibi disclosed this at an investors forum held recently. Here are key takeaways from the forum:

  • The $12.9 million loan was from Abraaj.
  • The planned conversion is due to volatility in the forex market.
  • The company will redeem part of the loan.
  • The company has plans of paying an interim dividend later in the year.
  • The company also plans to raise $100 million as fresh capital.

The move to convert the loan to equity highlights the challenges that companies face when they take loans in foreign currency. The sharp depreciation of the Naira against the dollar last year caused many companies to report losses.

Cement maker Lafarge Wapco, plans to seek shareholders approval to raise equity of up to N140 billion in form of a rights issue. The funds will be used to pay down a quasi convertible loan by parent company Lafarge Holcim. Guiness Nigeria Plc, recently sought approval from shareholders for a rights issue which will be used to pay a foreign currency loan from parent company, Diageo.

Abraaj a private equity fund was founded in 2002 by Arif Naqvi. The fund has about $10 billion assets under its management. CI leasing was established in 1990 to provide operating and finance leases. The company has since diversified into fleet management, personnel outsourcing, and marine services. In 1998, C&I leasing became the first and only leasing company to be listed on the Nigerian Stock Exchange (NSE). Abraaj took a stake in the company in July 2006.

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