![[Buy Sell or Hold] UACN After Release of Half Year Results](https://nairametrics.com/wp-content/uploads/2015/08/UAC-OF-NIGERIA.png)
UACN, one of Nigeria’s oldest conglomerates yesterday sent a notice to the Nigerian Stock Exchange (NSE)with respect to a proposed N15.4 billion rights issue. Here are key points from the notice:
- The company had initially planned to raise N20 billion in 2015 consisting of N15 billion through a private placement and N5 billion through a rights issue.
- The shareholders approved only the N5 billion rights issue.
- After reviewing developments within the company and the capital markets, the company decide to shelve the capital raising programme.
- The company now wants to raise N15.4 billion through a rights issue.
Reasons UACN wants to raise the money.
- Rights issues are being pursued at Grand Cereals Limited and Livestock feeds worth N7 billion and N0.75 billion respectively.
- In addition, both firms need working capital.
- UAC’s real estate subsidiary UPDC, is also pursuing a rights issue of N5.2 billion.
- UAC believes that a rights issue of N15.4 billion will be enough to support its subsidiaries, and capital for investment opportunities that may arise.
Here is a copy of the notice.
First quarter 2017 results for the conglomerate saw an increase in revenue from N17.6 billion in 2016 to N24.9 billion in 2017. Profit before tax decreased from N1.7 billion in 2016 to N829 million in 2017, due to a massive increase in finance cost. Year to date, the company’s shares are down 13.62%, under performing the NSE All Share Index which is up 4.54%.
