In a notice sent to the Nigerian Stock Exchange (NSE) yesterdayy, Ellah Lakes Plc released details of its Annual General Meeting (AGM) which will hold on Thursday, September 27, 2018.
The company, however, dropped hints of a possible capital raise under the special agenda items to be treated that day.
- That the authorized share capital be increased from N60 million comprising 120 million shares to N 1 billion comprising 2 billion ordinary shares of 50 kobo each by the creation of 1.8 billion shares.
- That the directors be authorized to raise debt or equity capital up to N5 billion from by way of a private placement.
A new sheriff in town?
The wording of the notice suggests the company may have a new majority investor, going by its intent to raise funds through a private placement. The Ellah family, which founded the firm is the current majority shareholder.
The new investor may its work cut out, as the company has recorded losses in the last five years and suspended operations of its farm in Omuaku since December 2017 due to militant activities. This has resulted in its auditors raising a red flag about the company’s ability to continue as a going concern.
Retail investors will kick
The Annual General Meeting could be filled with drama, as retail investors may kick against the move, due to a possible dilution of their shares.
Ellah Lakes closed at N4.26 in yesterday’s trading session, unchanged from its last trading day. Year to date, the stock is flat.
Results for the full year ended July 2018, show the company made revenue of N140,000 and a loss before tax of N10.7 million.
Ellah Lakes was incorporated on the 22nd of August 1980 as a private limited liability company. It was converted to a public limited liability company on the 16th of June 1992 and listed on the NSE on the 14th of January 1993. The company is in Port Harcourt, Rivers State and is primarily into fish farming.