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Corporate Actions: Rebuttals and a rights issue

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Corporate actions are decisions taken by companies’ boards of directors or management teams, that could have impacts on the firms themselves or shareholders.

Examples of corporate actions include the payment of dividends, closing of shareholders’ registers, announcing qualification dates and Annual General Meeting (AGM) dates.

Here is a review of corporate actions that took place last week.

Rebuttals 

Morrison Industries Plc and Meyer Plc issued responses to media reports pertaining to the shut down of their firms by the Federal Inland Revenue Service.

Meyer Plc, in its response stated that the shut down lasted a few hours, and was due to an error on the part of the FIRS. The agency had shut it down due to tax arrears of N54.6 million for 2016, which it had paid. After providing proof of payment, its premises was reopened.

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Morrison Industries Plc also stated that its shut down was in error. The FIRS had also shut the firm down pertaining to tax liabilities for the 2016 assessment year. After providing proof of payment, the premises got reopened.

An Extension

Seplat Plc in a notice sent to the NSE, has extended its closed period which was to  end on Thursday, 28th February, 2019 till 24 hours after its result is released. The closed period commenced on Monday, 31st December, 2018.

The extension was made, following a board meeting scheduled for Thursday, 28th February, 2019.

During a closed period, management and board members with access to sensitive information can not trade their shares.

Forte Oil Plc

Forte Oil Plc announced its plans to hold an Extraordinary General Meeting on the 7th of February, 2019. The main agenda for the meeting is to obtain shareholders’ approval to enter into discussions with its Chairman, Femi Otedola concerning assets it intends divesting from.

The assets, namely its upstream unit, Ghanaian operations, and a stake in the Geregu power plant, will be independently valued and sold at commercial terms on an arms length basis.

Otedola is in the process of divesting his entire stake in the company.

Julius Berger Plc 

The board’s audit committee will be meeting on Wednesday January 30, 2019 to consider the company’s fourth quarter results. As such, a closed period commenced from January 17, 2019 and will end on January 30, 2019.

Stanbic IBTC Holdings 

A board meeting is scheduled to hold on Thursday, 31 January, 2019 at 10:00am.

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The meeting will discuss audited financial statements for the year ended 31 December, 2018 for both the holding company, and subsidiaries.

A closed period which commenced on December 01, 2018 is still in effect.

This week, the board also announced the appointment of Mr. Barend Johannes Kruger as a Non-Executive Director with effect from 18 January, 2019 following the receipt of all required regulatory approvals. Kruger, has over 30 years of experience mostly with the Standard Bank Group.

One more step

The board of Zenith Bank Plc met on January 18, 2019 and among other things, approved its audited results for the financial year ended December 2018. The results have been forwarded to the CBN for approval, after which the bank will notify the Exchange.

Ella Lakes Plc

Ella Lakes released its results for the first quarter ended October 31st 2018. The company recorded a loss and apparently remains moribund, as the only revenue made was interest income.

ETI

Ecobank Transnational Incorporated (ETI), parent company of the Ecobank Group, has appointed Ms. Arunma Oteh to its board of directors as a Non-Executive Director.

Ms Oteh,  who began her career in finance in 1985, has had working experience in several organizations, including the World Bank and Africa Development Bank.

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Oteh was Director General of the Securities and Exchange Commission between 2010-2015 and is currently with Oxford University as an academic scholar at St. Antony’s College and an executive-in-residence at SAID Business School.

Vitafoam Plc

Vitafoam Plc commenced a closed period from the 17th of January, 2019 till the release of its results for the first quarter ended December 31st 2018.

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Access Bank Plc

The bank issued a statement in response to some media reports that it intended issuing N150 billion worth of bonds. It had submitted an application to the CBN and SEC with respect to a N15 billion green bond, but would evaluate market conditions, before deciding to go ahead.

The bank also held a press brief this week, to update the public on progress with its planned merger with Diamond Bank Plc, and other issues.

Diamond Bank Plc 

Diamond Bank Plc informed the Exchange that it has obtained the Central Bank of Nigeria and the Securities & Exchange Commission’s approval-in-principle for the proposed scheme of merger between Diamond Bank Plc and Access Bank Plc.

The next step is to obtain the approval of  shareholders of both banks at a court ordered meeting, as well as the sanction of the Federal High Court.

Further details will be communicated to the market upon relevant approvals from shareholders and regulators.

NEM Insurance Plc

NEM Insurance Plc Friday announced that AFIG funds had acquired a 29.9% stake in the firm, and is now the single largest individual shareholder. AFIG is a private equity firm, with other portfolio companies in Nigeria.

AFG, may have acquired shares hitherto held by the VFD Group and other key investors.

No word yet

Etranzact International this week held an Extra Ordinary General Meeting (EGM) to obtain shareholders approval to raise N7 billion in fresh capital. The company is yet to issue a notice following the meeting.

A rights issue in view

Sovereign Trust Insurance, through its stockbroker, Dynamic Portfolio Limited, submitted an application to the Nigerian Stock Exchange for the approval and listing of a rights issue of 4,170,411,648 ordinary shares of N0.50 each at N0.50 per share, on the basis of 1 new share for every 2 ordinary shares held.

The qualification date for the rights issue was Tuesday, 15 January, 2019.

The company had at an EGM held in September 2017, obtained shareholders approval to raise fresh capital.

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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Cryptocurrency

Ripple’s chairman transfers 500,000,000 XRP

Chris Larsen, Ripple’s co-founder and Chairman transferred 499,999,979XRP. 

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The fourth most valuable crypto in the crypto-verse is on limelight again. Data from Whale Alert revealed that Chris Larsen, Ripple’s co-founder and Chairman transferred 499,999,979XRP  worth (115,847,491 USD) to unknown wallet.

The Ripple’s co-founder, via his Twitter feed, commented on the move, and further revealed the unknown wallet, he transferred the huge stacks of Ripple.

“As some of you may have noticed, I moved an $XRP wallet to NYDIG. I’ve known the founders for a while, and am impressed by their security and top-notch institutional standards — this is truly custody 2.0.,” Larsen tweeted.

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What we know: NYDIG provides digital asset services to investors around the world. NYDIG’s custody platform, built fully in-house, is designed to satisfy the highest regulatory, audit, and governance standards, and NYDIG’s team is comprised of professionals with deep experience in capital markets, technology, and digital assets.

Quick fact: Ripple (XRP) plays dual roles as a payment platform and a currency. The platform is an open-source platform that is created to allow quick and cheap transactions.

Unlike its crypto rival, Bitcoin, which was never intended to be a simple payment system, Ripple has gained the attention of major global banks such as Standard Chartered and Barclays for international transactions worldwide.

Global banks having a relationship with Ripple

Japan-based Mitsubishi UFJ Financial Group, with assets of more than USD 2.8 trillion, announced in November 2018 that, in cooperation with Ripple, it would provide an international money transfer service on the payment corridor from Japan to Brazil.

Banks using Ripple include Europe’s banking giant, HSBC Holdings Plc, with assets of about $2.5 trillion, which disclosed in 2019 that it would use the XRP payment solution.

Japan Post Bank with assets of USD 1.9 trillion, Sumitomo Mitsui Financial Group, and Mizuho Financial Group with trillions of dollars in assets, also have a close relationship with Ripple Asia. Others having a relationship with Ripple include Banco Santander, Barclays PLC, Royal Bank of Canada, and Toronto-Dominion Bank.

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Stock Market

MTN Nigeria records gain, investors profit up by N42 billion

REDSTAREX led 9 Gainers as against 17 Losers topped by UBN at the end of today’s session.

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Global stocks sell-off persists as resurgence of COVID-19 frighten investors 

Nigerian bourse on Tuesday closed its trading session on an impressive note. The All Share Index gained by +0.31% to close at 25,574.35 points as against +0.01% appreciation recorded on Monday.

  • Its Year-to-Date (YTD) returns currently stands at -4.42%. Nigerian Stock Exchange capitalization presently stands at N13.408 trillion.
  • Investors gained N42.09 Billion.
  • Nigerian bourse trading turnover printed positive as Nigerian Stock Market trading moved and gained 33.61% as against +1.36% uptick recorded on Monday.
  • ZENITHBANK, FBNH, and TRANSCORP were the most active to boost market turnover.
    Market breadth ended negative as REDSTAREX led 9 Gainers as against 17 Losers topped by UBN at the end of today’s session – an unimproved performance when compared with the previous outlook.

Top gainers

  • REDSTAREX up 9.80% to close at N3.25
  • TRANSEXPR up 9.33% to close at N0.82
  • MTNN up 2.41% to close at N123
  • FBNH up 2.04% to close at N5
  • DANGSUGAR up 0.83% to close at N12.1

Top losers

  • UBN down 6.54% to close at N5
  • INTBREW down 2.94% to close at N3.3
  • UACN down 1.56% to close at N6.3
  • PRESCO down 0.80% to close at N49.5
  • DANGCEM down 0.22% to close at N134.7

Outlook

Nigerian bourse unsurprisingly ended higher amid rising oil prices and high buying pressures noticed in NSE30 stocks like Dangote Sugar, First Bank, and MTN Nigeria.

  • Market liquidity was notably higher as institutional investors increased their stakes on decent stock brands.
  • In spite of the sell-offs in global markets, and the dollar strengthening upward, as Local investors are taking advantage of undervalued stocks across the spectrum
  • Nairametrics, however, envisages caution in selecting stocks, as market indicators show high uncertainty in the coming days.

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Debt Securities

United Capital Plc lists N10 billion fixed rate bonds

United Capital Plc has listed its N10bn, 5 Year 12.5% Senior Unsecured Fixed Rate Series I Bonds.

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United Capital Asset Management explains mutual funds’ positive performance

Today, September 22, 2020, the Nigerian Stock Exchange (NSE) announced the listing of United Capital Plc’s N10 billion, 5 year senior unsecured fixed-rate series bonds due 2025, with a 12.5% interest.

In a statement made available on the NSE website, and signed by Godstime Iwenekhai, Head, Listings Regulation, the medium-term bond will be issued as part of the N30 billion Debt Issuance Programme.

The subscription for the offer will last for twelve (12) days, as the offer will open on the 4th of May, 2020, and close on the 15th of May, 2020.

Summary of the offer

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  • Issuer: United Capital Plc
  • Offer date: 28th of May, 2020
  • Maturity date: 28th of May, 2025.
  • Units of sale: 10,000,000
  • Price: N1000 per units offered
  • Coupon rate: 12.5%

Redemption: Semi-annually, and payable in arrears on 28th November and 28th May of each year, up to and including the Maturity Date.

Note: Senior unsecured bonds are a non-convertible corporate bond, that is not subordinated to any other unsecured indebtedness of the related issuer. Hence, it guarantees bondholders a quick payout in cases of default. While a fixed rate bond is a long-term bond, with an already specified coupon rate (Interest).

United Capital Plc, is a leading African financial and investment banking group, providing bespoke value-added service to its client. The firm was incorporated in Nigeria on March 14, 2004.

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