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Is this who sold 4.4% equity stake in Livestock feeds?

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livestock feeds

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.

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According to our records, Cash Craft owned about 103 million shares while First Capital Trust owned about 144.7 million shares in the company.

Financial troubles

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.

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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.

New Project

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.

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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.

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Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training. He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE). He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy. You can contact him via [email protected]

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Companies

Dangote delays London Stock Exchange listing

Dangote Cement Plc isn’t expected to attempt a U.K. initial public offering until at least 2023.

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Aliko Dangote rallies private sector operators against COVID-19, 10 fantastic things Aliko Dangote has done in the last 10 years

Africa’s richest man, Aliko Dangote, is once again delaying plans to list Nigeria’s second most capitalized company on the London Stock Exchange, rather choosing other options like boosting exports and the Nigerian company’s foreign-exchange reserves in a report credited to Bloomberg.

Dangote Cement Plc, Africa’s biggest producer of building material isn’t expected to attempt a U.K. initial public offering until at least 2023, Temilade Aduroja, Head of Investor Relations, at the Lagos-based company, said by email.

READ: Dangote Cement’s faltering pan-African operations is taking its toll 

READ: Access Bank N15bn green bond set to be the first cross listing ensuing from NSE-LuxSE partnership

“The London listing is not something which will happen in the short to medium term. We are focused on our export strategy and increasing our foreign-currency revenue,” he said.

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Dangote, a major shareholder of Dangote Cement, with a net worth of more than $14 billion has longed for the company to have a secondary London Stock Exchange listing to diversify its holding and gain more leverage to cheaper funds on international markets.

READ: Rocket Internet sells stake in Jumia, as eCommerce firm struggles with post-IPO scandal

READ: Afreximbank forced to postpone IPO plan in London; here’s why 

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Aliko Dangote said in 2018 that the listing would happen the following year (2019), only for Brian Egan, former Chief Financial Officer, to state that 2020 was more likely.

More detail later as the story is developing…

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Companies

NB Plc to raise additional N20 billion from its N100 billion Commercial Paper

Nigerian Breweries has announced the continuation of its N100 billion Commercial Paper (CP) Issuance Programme.

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dividend, Nigerian Breweries reports reduced profits for first three quarters of 2019 , Analysis: Nigeria Breweries, the glory days are gone, Nigerian Breweries to raise additional N20 billion from its N100 billion CP programme

Nigerian Breweries has announced the continuation of its N100 billion Commercial Paper (CP) Issuance Programme in a bid to raise up to N20 billion to support its short term funding needs. The company has launched Series 9 and 10 of the programme for this purpose.

This information was disclosed in a notification signed by the Company’s Secretary, Uaboi G. Agbebaku, and sent to the Nigerian Stock Exchange.

The notification reads;

“[Nigerian Breweries Plc] is pleased to inform the Nigerian Stock Exchange and the investing public of the continuation of its “CP” (Commercial Paper) programme with the launch of Series 9 and 10 of the programme.

“Series 9 of the Commercial Paper programme would be for a tenor of 180 days, while Series 10 would be for 270 days. However, the launch of the CP opens today 23rd October 2020.”

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(READ MORE:Nigerian Breweries stock up by 58% since August )

What you should know

According to data obtained from Financial Market Dealers Quote (FMDQ), Nigerian Breweries has raised up to N90.12 billion since the start of the year.

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  • N52.76 billion was raised from Series 6 between February 12 to November 6, 2020.
  • N13.03 billion was raised from Series 7 from April 15 to October 14, 2020.
  • N24.33 billion was raised from Series 8 from April 15 to January 8, 2021.
  • The recent issuance of the Series 9 and 10 CP will bring the total funds raised to N110.12 billion.

Why it matters

  • The CP will help the company navigate through the recent impact of COVID-19 and other trade disruptions.
  • The programme will strengthen the balance sheet of the company, and enable the brewer to execute its plans while delivering value to customers and creating wealth for shareholders,
  • In like manner, the CP programme is expected to provide opportunities for non-equity investors to invest in the company and support its cost management initiatives.

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Companies

MTN shareholders have made approximately N1 trillion since April 2020

Shareholders of MTN Nigeria gained close to a trillion naira in less than 7 months.

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MTN Nigeria, MTN Nigeria Communications Plc. begins N100 billion commercial paper issuance today, MTN Nigeria Communications Plc: increase in other income, others boost revenues.

MTN Nigeria shareholders have gained N986.58 billion since the first trading session in April 2020.

This was uncovered by calculating the difference in the telecommunication giant’s market capitalization of ₦1.832 trillion at the open of trade, for the first trading session in the month of April 2020, and the market capitalization of ₦2.646 trillion at the close of trade in the first trading session in the month of October.

READ: Shell to cut 9,000 jobs globally due to oil price crash as it shifts to clean energy

This gives a whopping N814 billion increase in market capitalization, and this with the dividend the company has paid to shareholders on two occasions between this time period, brings the total gains both realized and unrealized to approximately N1 trillion.

READ: FUGAZ; Nigerian banks considered too big to fail

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Hence, the N814 billion increase in market capitalization translates to the joint gains MTN investors have made from the increase in the shares of the company, as the share price of the company has increased by 44.44% or ₦40.00 between April 1, 2020, and October 2, 2020, with the share price of increasing from ₦90.00 to ₦130.00.

However, the gains MTN NG investors have made from their investments in the telecommunication company, is not limited to the gains driven by the increase in the price of the shares.

READ: World Bank says Nigerian banks are at risk of being destabilised by COVID-19

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Recall that the company declared payment of dividends to its shareholders on two occasions, as investors/shareholders of the company, whose names appear in the Register of Members, as of the close of business on April 17, 2020 and August 14, 2020 were paid a cumulative dividend per share of ₦8.47, for all the outstanding shares of 20,354,513,050 held by the shareholders, and this translates to a total dividend payout of N171 billion by the company to its shareholders.

It is noteworthy that the realized and unrealized gains MTN investors have made from holding the shares over this period stands at N986.58 billion.

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