C and I Leasing Plc, through its Stockbroker, CSL Stockbrokers Limited, has applied to the Nigerian Stock Exchange (NSE), seeking an approval for its listing of a Rights Issue of 539 million ordinary shares of 50 kobo each at N6 per share, on the basis of 4 new ordinary shares for every 3 ordinary shares held.
In a statement by Godstime Iwenekhai, the Head, Listings Regulation Department, NSE, it was made known that the Qualification Date for the Rights Issue is today Wednesday, 4 September 2019.
Possible reasons: The proposed right issue is poised to increase C and I Leasing’s profit and at the same time boost its financial growth.
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It is however of common knowledge that Rights issue is generally a way for companies to raise capital. In this regard, capital is raised when investors pay for the new shares that are being issued.
C and I Leasing may use the raised capital to acquire assets, make a take-over, repay debts or save itself from bankruptcy. Although a company can raise capital in other ways, such as borrowing from banks or issuing bonds, there can however be times when the companies may be reluctant to seek credits from banks because of the high-interest rate incurred by loans.
A look into the company’s financial records: C and I Leasing Plc recorded significant growth in recently-released half-year results, as the company recorded gross earnings of N16.3 billion, up by 27.2% from the N12.8 billion recorded in 2018 H1.
The company’s Profit before tax increased by 25.8% from N723 million recorded in 2018 H1, to N909.2 million in 2019. Similarly, C and I Leasing realised a profit after tax of N866.9 million, up by 27.1% year-on-year from N682.2 million recorded in 2018.