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DEAL: VFD Group may take key stake in Abbey Mortgage Bank

@vfdgroup may take a key stake in Abbey Mortgage Bank Plc, through a private placement. Shareholders of the bank gave approval at its AGM held this week.

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Abbey Mortgage Bank to raise capital, Abbey Mortgage Bank to issue shares

Abbey Mortgage Bank Plc may have a new key investor soon, going by some of the resolutions passed at its Annual General Meeting (AGM), which held on Monday. During the event, shareholders approved the following resolutions:

  • That the authorized capital of the company be increased from N3.5 billion to N6 billion by the creation of 5 billion ordinary shares which will rank pari passu with existing shares.
  • That the company be authorized to raise N2.3 billion in capital by way of private placement.
  • Subject to regulatory approval, the private placement shall be by way of sale of 2,261,538,462 ordinary shares at the rate of N1.05 to VFD Group.

If the deal clicks

Abbey Mortgage Bank currently has 4.2 billion shares outstanding. If the private placement is approved, VFD group will be one of the majority shareholders in the company.

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Current key shareholders 

Figures from Abbey Mortgage Bank’s 2018 full year financial statements showed that the largest shareholders were Rose Ada Okwechime and Chief Ifeanyichukwu Boniface Ochonogor. Okwechime is the founder and Managing Director.

Okwechime has a 30% stake through her personal holdings and Madonna Ashib Comm. Enterprise Ltd. Ochonogor holds a 30.75% stake through his personal holdings and Forte Properties & Investment Ltd.

Earlier moves

In an exclusive interview with Nairametrics last year, CEO of the group, Nonso Okpala, had hinted at plans of getting into the banking space.The firm had also raised N2.7 billion through a rights issue and private placement.

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About VFD Group

VFD Group was incorporated with the Corporate Affairs Commission (CAC) on 7 July, 2009 and commenced business operations effectively on 1 January, 2011.

The company’s subsidiaries include VFD Microfinance Bank, Everdon Bureau De Change, and Anchoria Asset Management

About Abbey Mortgage Bank

The bank was incorporated in Nigeria as a private limited liability company on 26 August 1991 and obtained its license to operate as a mortgage bank on 20 January, 1992. It commenced business on 11 March, 1992 and later converted to a public limited liability company in September 2007.

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On 21 October 2008, the bank became officially listed on the Nigerian Stock Exchange. On 16 January, 2014, it changed its name from Abbey Building Society Plc to Abbey Mortgage Bank Plc.

The bank last traded on the 11th of July, 2019 at N0.90 per share. Year to date, the stock is down 8.16%.

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Patricia

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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Corporate deals

Dangote Sugar completes acquisition with Savannah Sugar Company Limited 

Dangote Sugar Refinery will henceforth assume all legal proceedings.

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Dangote Sugar Refinery to merge with Savannah Sugar, Dangote was $4.3 billion richer in 2019, Dangote Sugar announces closed period, ban insider shareholders from trading , Dangote Cement: Weak revenue performance, elevated OPEX weigh on earnings

Dangote Sugar Refinery has been authorised to receive all the assets, liabilities and business undertakings, and property rights of Savannah Sugar Company Limited (SSCL) 

This was one of the resolutions passed at the court-ordered meeting of the members of Dangote Sugar Refinery Plc held on Thursday at the Eko Hotel & Suites, Victoria Island, Lagos 

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According to the notice of the proceedings sent to the Nigeria Stock Exchange, and seen by Nairametrics, Dangote Sugar Refinery is hereby authorised to receive all the assets ((including all tax attributes, unutilized capital allowances, tax losses, withholding tax credits and any other tax refunds available subject to the approval of the FIRS), liabilities and business undertakings, including real property and intellectual property rights of Savannah Sugar Company Limited (“SSCL”) transferred by SSCL to the Company (pursuant to the Scheme of Arrangement between SSCL and its shareholders) upon the terms and subject to the conditions set out in the Scheme of Arrangement without any further act or deed”.  

READ ALSO: Dangote Sugar appoints new Chief Operating Officer

Dangote Sugar Refinery will henceforth assume all legal proceedings, claims and litigation matters pending or contemplated by or against Savannah Sugar. 

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In view of this acquisition, the court also ordered Dangote Sugar Refinery to issue and allot to the shareholders of Savannah sugar, 146,878,241 ordinary shares of N0.50 each in the share capital, for the 162,756,968 ordinary shares held by the Scheme Shareholders in SSCL 

The Scheme Document dated Friday, May 29, 2020, was also approved at the meeting, and Directors of DSR were authorised to consent to any modifications that the Securities and Exchange Commission may deem fit, and give effect to the scheme.  

READ MORE: Stock Market rains big for Nigerian billionaires in May

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Dangote Sugar Refinery had earlier sent a disclosure notice to the NSE, announcing its plans to acquire Savannah Sugar Company Limited, subject to the approval of both company shareholders.  

Dangote industries recently sold its flour subsidiary, and this acquisition is part of an expansion strategy for Dangote Sugar Refinery, and the next stage of its backward integration plan to revolutionize the sugar sub-sector of Nigeria’s economy. 

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Corporate deals

Fairfax Africa Holdings enters purchase agreement with Helios Holdings Ltd 

Fairfax Africa Holdings Corp. agreed to merge with Helios Holdings Ltd.

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Fairfax

Canada-based Fairfax Africa Holdings Corporation has reached an agreement to merge with Helios Holdings limited, the Africa-focused private equity firm which was co-founded by Tope Lawani and Babatunde Soyoye. The purpose of the merger is to create a truly pan-African investment firm.

A statement made available by Fairfax, as seen by Nairametrics, noted that when the deal is finalised, Fairfax Africa Holdings Corporation will be renamed Helios Fairfax Partners Corporation. The company will remain listed on the Toronto Stock Exchange and the Helios co-founders will be joint Chief Executives of the new company. 

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The terms of the deal will also require Helios to exchange 45.6% of equity and voting interest in the new company. Helios will contribute its performance and management fees through its present and future holdings under the Helios funds, thereby making Helios Fairfax Partners Corporation one of the biggest Africa-focused asset management firms by complementing the experiences and funds of both companies under one umbrella. 

The new company will also have a larger capital base for diversified investment inflows to the continent through years of experience in third-party investment management operations and the support of longer-term institutional shareholders. 

The main objectives of this deal are summarised below:

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  • Helios Fairfax Partners Corporation to become the leading pan-Africa focused listed alternative asset manager with unique capabilities to invest across the continent
  • Creates a diversified investment platform combining best in class third-party investment management capabilities with the strength of long-term shareholders in a permanent capital vehicle
  • Provides an enlarged capital base, increasing capacity to invest as well as to launch additional and differentiated Africa focused asset management strategies and initiatives
  • Reinforces the parties’ shared long-term commitment to be a consistent and trusted provider of capital to growing African businesses across market cycles
  • Tope Lawani and Babatunde Soyoye, the co-founders and Managing Partners of Helios Investment Partners LLP, will become joint CEOs of the combined holding company, enabling the company to build on the track record they have established over the last 15 years

In his remarks, Tope Lawani disclosed that the deal will offer emerging market investors the opportunity to gain exposure to the continent through their portfolio.

“We take a long-term view on our investments, and many have proved resilient even in this pandemic with a number of our investments in sectors such as telecommunications, payments, and food,” Lawani said. 

He added that the transaction will offer Helios access to permanent capital from equity markets that can be used to accelerate its product and growth strategy.

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Helios, which was founded in 2004, has raised third party private capital for the past 15 years investing in Africa companies including First City Monument Bank (exiting in 2013), Interswitch, Vivo Energy and Helios Towers Plc. 

Fairfax was founded by Canadian Billionaire Prem Watsa and will own 45.6% of the Helios Fairfax Partners Corporation. Before the merger, Helios was raising $1.25 billion for its Africa focused fund and had landed a commitment of $100 million from the U.K’s CDC Group. 


You may read the full statement by Fairfax by clicking here.

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Corporate deals

Access Bank in advanced discussions with Zambian Bank regarding merger

The bank noted that there are no guarantees to whether the transaction pans out or not.

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Nigeria has over 40 million people without access to bank accounts – Access Bank, Access Bank Surulere branch engulfed by fire

Access Bank Zambia Limited announced that it is now in advanced discussions with Cavmont Capital Holdings Zambia Plc. regarding possible merger of Cavmont Bank LimitedThe announcement was disclosed by Nigerian Stock Exchange (NSE) in a corporate disclosure which was duly signed by the Company Secretary, Mr. Sunday Ekwochi. 

The disclosure by the bank read, Access Bank Plc (“Access Bank”) announces today that its wholly-owned subsidiary in Zambia, Access Bank Zambia Limited (“Access Bank Zambia”) has entered into exclusive discussions with Cavmont Holdings Zambia Plc (“Cavmont Capital”) regarding a potential transaction between Access bank Zambia and Cacmont Bank Limited (“Cavmont Bank”), a wholly-owned subsidiary of Cavmont Capital. The potential transaction relates to the sale of 100% of Cavmont Capital interest in Cavmont Bank to Access Bank Zambia.” 

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READ ALSO: CBN imposes fresh CRR debits on banks to the tune of N118 billion

The bank has, however, noted that there are no guarantees as to whether the transaction pans out or not. There can be no certainty that a transaction will be agreed, nor as to the terms of any such agreement. The completion of a transaction would be subject to formal regulatory approvals. Access Bank will update the market as appropriate and in accordance with its disclosure obligations. It also advised shareholders accordingly, to exercise caution when dealing in Access Bank’s securities until a full announcement is made. 

Nairametrics had reported in October 2019 that Access Bank from the first quarter of 2020, would expand its footprint across Africa. After its merger with Diamond Bank, it acquired 100% of Kenya’s Transnational Bank Plc and its 28 branches, as the Central Bank of Kenya (CBK). Three months later, it also notified the Nigerian Stock Exchange of its intention to establish a subsidiary in Cameroon. 

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Access Bank Plc. recorded a profit after tax of N40.9 billion in the first quarter period ended March 31st, 2020. This was bolstered by an increase in Net interest income which stood at N72.2 billion, indicating a 27% increase compared to N56.8 billion that was recorded in Q1 2019. 

Explore economic research data from Nairametrics on Nairalytics

Its shares at market open today stood at N6.40, on the lower end of its 52-week range of N5.30 and N12.00. It’s price to earnings ratio was 2.24 and price to book, 0.3566 

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