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Home Industries Company News

UPDC seeks approval to list N15.96 billion worth rights issue 

Damilare Famuyiwa by Damilare Famuyiwa
September 30, 2019
in Company News, General News
UPDC seeks approval to list N15.96 billion rights issue 
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UACN Property Development Company Plc (UPDC) has through its Stockbroker, Stanbic IBTC Stockbrokers Limited, submitted an application to The Nigerian Stock Exchange for the approval and listing of a Rights Issue of N15.96 billion.

The rights issue is of Fifteen Billion, Nine Hundred and Sixty One Million, Five Hundred and Sixty-Three Thousand, Two Hundred and Sixty (15,961, 563, 260) ordinary shares of Fifty Kobo (N0.50) each at One Naira (N1.00) per share, on the basis of forty-three (43) new ordinary shares for every seven (7) ordinary shares held.

[READ MORE: Wapic Insurance seeks NSE’s approval to list 15.6 billion rights issue]

In a notification sent to dealing members of the stock market, the NSE disclosed that the Qualification Date for the rights issue was scheduled for Monday, September 30, 2019. 

Possible reasons: The proposed rights issue is believed to be raised as a means of repaying UPDC’s short term debt obligations.  

It is of common knowledge that a rights issue is a way for companies to raise capital. In this regard, capital is raised when investors pay for the new shares that are being issued.  

Prior to this development, UAC Nigeria announced to spin off its shareholding in UPDC to its shareholders. Figures from UPDC’s FY 2018 results, however, show that UAC holds 64.16% or 1.6 billion of the 2.5 billion outstanding shares. 

What you should know: UPDC has been on the losing side for several years, despite efforts to turn it around.   

Results for the half-year ended June 2019 show that the firm recorded a N1.2 billion loss. 2018 audited results show that the firm recorded a N15 billion loss. Auditors had expressed concern over the status of the firm.   

[READ ALSO: International Breweries seeks capital raise through rights issue]

The company has been losing despite the fact that it raised N5 billion through a rights issue in 2017 largely to deleverage its balance sheet. Parent company UAC, in 2017, also had to raise funds through a rights issue, with part of the proceeds used to take up its shares in the UPDC fundraise. 

 

 

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Tags: Stanbic IBTC Stockbrokers LimitedThe Nigerian Stock ExchangeUAC NigeriaUACN Property Development Company Plc

Comments 1

  1. Samina Tejani says:
    September 30, 2019 at 5:48 pm

    Pls. Unsubscribe

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