Data from the Nigerian Stock Exchange reveals that 132 million shares of Livestock feeds were traded at an off market transaction valued at N133 million.
The deal is a significant one, because it represents a significant portion of the company’s share capital. The company has an issued and fully paid share capital of 2 billion ordinary shares.
Who is selling?
The transaction was executed at N1 which is at a premium to the company’s share price of 85 kobo as at Thursday’s trading session. The bloc transaction suggest the sale is probably being made by one of the significant shareholders in Livestock Feeds.
The company before now had three strategic investors. UACN with 51%, First Capital Trust with 7.2% and Cash Craft Ltd with 5.1%.
Our bet is on Cash Craft considering the recent controversies surrounding its suspension by SEC. However, the suspension has been lifted and analysts believe the company may be exploring a divestment to aid its restructuring. There is also a suggestion that First Capital Trust might be the ones selling considering that it owns enough shares in the company to sell-down about 132 million shares.
According to our records, Cash Craft owned about 103 million shares while First Capital Trust owned about 144.7 million shares in the company.
Livestock feeds has been struggling with high operating and financing costs, and has had to rely on inter company loans from its parent company, UACN Plc and other companies within the UAC group. Half year results for the period ended June 2017, show the company made a loss of N455 million.
The company recently launched a N750 million rights issue to raise fresh funds at the rate of one new share for every two already held. In addition to an inter company debt of N1.2 billion including bank loans of N2.2 billion as at December 2016.
The company claimed it would use 40% of the equity raised in the development of a new site at
Flower Gate Industrial Area, Sagamu, Ogun State. The balance 60% it concludes will be used to finance working capital requirements.
The company explained this was what it was using the rights issue funds for
The Head Office of the Company is located on about 1.99 Acres of land size. The location accommodates the Head Office block, Ikeja Mill Office, Factory and Warehouse. However, due to growth in activities of the Mill, space constraint has become an impediment which the Company is struggling to cope with.
This resulted to leasing of warehouses at different locations for storage of raw materials, particularly during annual stockpile activities. Your Company has however acquired 10.066 acres of land at Flower Gate Industrial Area at Sagamu Interchange in Ogun State, which will provide solution to this space constraint.
The first phase of the development which includes landscaping of the site and building of warehouses, are proposed to be executed with funds from the proceeds of the Rights Issue
About Livestock Feeds
Livestock feeds Plc commenced business in May 1963 as a subsidiary of pharmaceutical giant Pfizer and was listed on the NSE in 1973. The company is engaged in the manufacturing of livestock feeds and animal concentrates.
According to information on the website of the company, in 1996-97 Pfizer divested its interest in Livestock Feeds and its interest was acquired by Adset Ltd through an M.B.O.
Later, First Capital Trust Limited was engaged as Turnaround Managers in 2005 as First Capital Trust Limited replaced Adset as the Core investor in the newly invigorated company. Also Cashcraft Asset Management became the second largest shareholder, until UACN acquired about 51% of the company.
The company is a subsidiary of UACN Plc, one of Nigeria’s oldest conglomerates. The stock closed at 85 kobo in yesterday’s trading session up 1.18% year to date, and is currently trading at 93 kobo as at 12.30pm in today’s trading session.