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Business News

Why C&I Leasing shares have been placed on suspension

The nation’s bourse, the Nigerian Stock Exchange (NSE) yesterday placed full suspension on trading in the shares of C & I Leasing Plc.

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C&I Leasing Plc, Nigerian Stock Exchange, NSE, Suspension

The nation’s bourse, the Nigerian Stock Exchange (NSE) yesterday placed full suspension on trading in the shares of C & I Leasing Plc.

According to NSE, this is to facilitate the ongoing share reconstruction of the leasing company. The full suspension is expected to remain until December 27, 2018 during which there will be no trading and price movement on the shares of C & I Leasing.

The full suspension will also enable the company’s registrars to update the register of shareholders for the planned share consolidation.

Recall that C & I Leasing revealed plans to reduce its paid up share capital by 80 per cent in a share capital reconstruction that will see cancellation of 1.506 billion ordinary shares.

According to the plan, four ordinary shares of 50 kobo each will be consolidated into one ordinary share of 50 kobo each. The reconstruction will reduce C & I Leasing’s current outstanding share capital of 1.883 billion ordinary shares of 50 kobo each to 376.56 million ordinary shares of 50 kobo each.

Share Consolidation

This means a reverse stock split whereby a company reduces the total number of its outstanding shares in the open market.

Growing concern by investors

Shares of the company plummeted 8 per cent since it secured regulatory approval last month for its stock consolidation wiping out some N200 million from the company’s market value. On Wednesday this week, the share price fell to N1.78 from N1.94 on Monday. This saw the a drop in the market value by 5 per cent to N3.4 billion from N3.6 billion.

For investors in the company, this will affect the volume of their stock holdings and not the value. For instance an investor with a million units of shares valued at N2 each, the aggregate value remains N2 million after the consolidation but the volume is down to 250,000 units of shares.

C & I Leasing Plc has been in operation for over two decades and has since evolved from being a finance leasing company licensed by the Central Bank of Nigeria (CBN) in 1991 to becoming a diversified, leasing and business service conglomerate, providing support services to various indigenous and multinational organisations in West Africa along three lines: Fleet Management, Personnel Outsourcing and Marine Services.

Fikayo has a degree in computer science with economics from Obafemi Awolowo University. ITIL v3 in IT service management. An alumnus of Daystar Leadership Academy. Prior to joining Nairametrics had stinct in Project management, Telecommunications among others. Also training in Consulting and Investment banking from Edubridge Academy. He has very keen interest in Politics, Agri-business, private equity and global economics. He loves travelling and watching football. You can contact him via [email protected]

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Economy & Politics

FG places high profile Nigerians under security watch for terrorism financing

The FG has said that it is currently profiling a large number of high profile Nigerians who have been alleged to have reasonable links to terrorism financing.

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FG to establish a new anti-corruption agency, P&ID, FG, malami, $9bn fine is a scam - Federal Government , UPDATED: P&ID operations shut down, assets forfeited by court order

The Federal Government has said that it is currently profiling a large number of high profile Nigerians who have been alleged to have reasonable links to terrorism financing.

This follows the arrest of an undisclosed number of suspects recently after the convictions of some Nigerians on terrorism financing in the United Arab Emirates (UAE).

This disclosure was made by the Attorney General of the Federation and Minister of Justice, Abubakar Malami, during a chat with the press at the Presidential Villa, Abuja on Friday.

What the Attorney General of the Federation is saying

The Minister said that the convictions of Nigerians in the UAE has given rise to wider and far-reaching investigations in Nigeria.

Malami in his statement said, “As you will actually know, sometimes back, there were certain convictions of Nigerians allegedly involved in terrorism financing in the United Arab Emirates (UAE).

That gave rise to a wider and far-reaching investigation in Nigeria and I’m happy to report that arising from the wider coverage investigation that has been conducted in Nigeria, a number of people, both institutional and otherwise, were found to be culpable, I mean reasonable grounds for suspicion of terrorism financing have been established, or perhaps has been proven to be in existence in respect of the transactions of certain high-profile individuals and businessmen across the country.

I’m happy to report that investigation has been ongoing for long and it has reached an advanced stage. Arriving from the investigation, there exists, certainly, reasonable grounds for suspicion that a lot of Nigerians, high-profile, institutional and otherwise, are involved in terrorism financing and they are being profiled for prosecution.

In essence, it is indeed true that the government is prosecuting and it’s indeed initiating processes of prosecuting those high-profile individuals that are found to be financing terrorism. It is indeed true.

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However, Malami did not give the number of such suspects as he maintained that investigation was still ongoing until a conclusion is arrived at.

“As to the number, the investigation is ongoing and it has to be conclusive before one can arrive at a certain number, but one thing I can tell you is it is a large number and they are being profiled for prosecution.

It is indeed a large number and I’m not in a position to give you the precise number as at now because the profiling and investigation are ongoing.”

Malami warned that government will not hesitate to invoke the full wrath of the law on anyone found culpable in sponsoring terrorism in the country as nobody found culpable in terrorism financing will be spared.

What you should know

It can be recalled that in March 2021, the Association of Bureau De Change Operators of Nigeria (ABCON) confirmed the arrest of some of its members by security operatives over the investigation of some of their transactions which border on money laundering, terrorism financing and Know Your Customer status.

ABCON in its statement said that it considers these as serious allegations especially given the security challenges facing the country. It appealed to the authorities to expedite action to ensure that innocent people who have been caught up in this investigation can be released and so that they can return to their anxious families and resume their lives.

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Macro-Economic News

Nigeria’s VAT collection surges to N496.4 billion in Q1 2021

Nigeria’s VAT collection surged by 52.93% (year-on-year) to stand at N496.4 billion in Q1 2021.

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VAT

Nigeria generated a sum of N496.39 billion revenue from Value Added Tax (VAT) in the first quarter of 2021, a surge of 52.93% year-on-year compared to N324.58 billion recorded in the corresponding period of 2020.

This is contained in the sectoral distribution of value added tax report, recently released by the National Bureau of Statistics (NBS).

According to the report, VAT collections in the period represents a 52.93% increase as against N324.58 billion recorded in Q1 2020; and a 9.17% increase compared to N454.7 billion recorded in the previous quarter.

The increase in VAT collections could be attributed to increased economic activity in the country, compared to the previous year, where most economic activities were put on hold as a result of the covid-19 pandemic.

Highlights

  • Highlights of the report showed that the manufacturing sector generated the highest amount of VAT with N49.41 billion generated, closely followed by Professional Services, having generated N42.50 billion, and State Ministries & Parastatals, which generated N26.96 billion.
  • Mining generated the least, closely followed by Pioneering, Textile & Garment Industry with N48.36 million, N77.01 million, and N289.41 million generated respectively.
  • Also, out of the total amount generated in Q1 2021, N224.85 billion was generated as Non-Import VAT locally while N171.66 billion was generated as Non-Import VAT for foreign.
  • The balance of N99.88 billion was generated as NCS-Import VAT.

Manufacturing sector topples professional services

The manufacturing sector toppled the professional services sector to lead the list of sectors with the highest VAT remittances in the first quarter of 2021. A total of N49.41 billion was collected as Value Added Tax from the manufacturing sector.

  • Professional services followed closely, having remitted N42.5 billion in VAT to the government, State ministries and parastatals stood in third position with N26.96 billion VAT.
  • Others on the list include; Commercial and trading sector with N22.8 billion, oil-producing (N15.8 billion), Transportation and haulage services (N14.9 billion), Breweries, bottling, and beverages (N11.9 billion).
  • Federal ministries and parastatals (N8.8 billion), banks and financial institutions (N3.3 billion), and oil-marketing (N3 billion).

Why this matters

  • The increase in VAT collection is a development in the right direction, especially given the recent positive growth recorded in global crude oil prices, indicating an increase in government revenue.
  • However, the government needs to intensify its effort in creating innovative ways of increasing revenue given growing overheads and statutory spending, coupled with increasing debt profile.

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