Unity Bank is raising N19.22 billion through a rights issue of 38.447 billion ordinary shares of 50 kobo each to existing shareholders at a price of 50 kobo each. The rights have been pre-allotted to shareholders on the register of the bank as at December 16, last year on the basis of one new share for one share held as at the closure date. The rights issue will close in late June.
Presco Plc plans to raise about N3.5 billion from existing shareholders with the board of directors of the oil-palm processing company expected to table a proposal for the new equity issue before the shareholders at the forthcoming annual general meeting.
The Board of Presco would be rooting for a rights issue of 100 million ordinary shares of 50 kobo each on the basis of one new share for every 10 shares held as at the qualification date. The board has indicated that the rights would be offered at N35 per share.
If approved at the general meeting, Sa Siat nv, which holds 60 per cent majority equity stake in Presco, will provide nearly two-thirds of the rights funds. Presco has 10,000 shareholders with the largest group of shareholders holding small units within the range of 1000 to 10,000 shares.
In the case of May & Baker Nigeria, Lt. Gen. Theophilus Danjuma (rtd), the major core investor in the healthcare company, will provide some one-quarter of the required equity funds if all shareholders pick up their rights. There are indications that Danjuma, who had earlier extended N2 billion bail-out to the company, might consider providing additional equity funds beyond his pre-allotted shares to bolster the success of the rights issue. Danjuma, a multi-billionaire, at the last count, held the largest equity stake of 24.38 per cent in May & Baker Nigeria through his company, T.Y. Holdings Limited.
Shareholders of Julius Berger Nigeria Plc are expected to vote on a new capital issue that could see injection of about N8 billion into the leading construction company. While the details of the new issue are still sketchy, directors of the company have indicated they could be raising funds through any form of debt and or equity instrument by way of public offering, private placement and rights issue among others.
At the forthcoming general meeting of Julius Berger Nigeria next month, shareholders are expected to increase the authorised share capital of the company from N622.50 million, comprising 1.245 billion ordinary shares of 50 kobo, to N800 million, comprising 1.6 billion ordinary shares of 50 kobo. This will create headroom for new issues.
The board of Julius Berger Nigeria would also be rooting for shareholders’ mandate to issue up to 150 million ordinary shares of 50 kobo each in the authorised share capital of the company to identified investor(s) by way of special placement, at a price per share to be determined on the basis of the volume weighted average closing price derived from the daily official list of the Nigerian Stock Exchange (NSE) over the 90-day period immediately preceding the date on which the company obtains the approval of the Securities and Exchange Commission (SEC).
Market analysts said they expected more companies to file for rights issue given the high gearing ratios of several quoted companies, which interest burden could stifle returns to shareholders in the period ahead.
Managing Director, GTI Securities, Mr. Tunde Oyekunle, said companies were making recourse to rights issue because of the relative lull in the public issue market.
According to him, the recourse to rights issue was a sign of confidence of shareholders in the prospects of their company, especially the core investor, which would provide the larger chunk of the required capital.
He pointed out that successful rights issue would help to set benchmark for future public offers and galvanise investors to participate in such offerings.
Parts of this article originally appeared in TheNation