The Transnational Corporation of Nigeria, Transcorp, announced today that it plans to increase its authorized share capital from N18billion to N22.5billion. It also plans to approve for its directors to issue 13billion ordinary new shares of 50kobo each by way of a rights issue. Transcorp shares price as at the day of announcement (25/2/2013) was N1.65.
If they were to announce a rights issue today, the company will be raising about N21.4billion ($138.3million). Transcorp currently has a negative working capital of about N20b which I believe they plan to crash against their share premium. The new equity they plan to raise will help the company fund its major expansion programs especially in the area of Power, where they just won one a bid to acquire a stake in the Power Generation Companies.
The proportion for which the rights issue will be made has yet to be announced, however my bet is that it may be one new share for every four held in the company.