Rights issue has dominated quoted companies’ capital raise between 2016 and 2019. This is according to data obtained from the Securities and Exchange Commission (SEC).
The data has it that while the companies in the country’s capital market raised a total of N768.7 billion capital in the last three years, rights issue recorded a total of N452.5 billion capital, which accounted for 58.87% of the total capital raised.
Breakdown: Companies that raised capital via a rights issue in 2017 were NASD Plc, Guinness Nigeria Plc, UACN Property Development Company Plc, Livestock Feeds Plc, ARM Life Plc and Trans-Nationwide Express Plc with N194.3 million, N39.7 billion, N5.16 billion, N1.1 billion, N1 billion and N223.7 million, raised.
Others were Unilever Nigeria Plc, Union Bank Plc, Consolidated Hallmark Insurance Plc, Morison Industries Plc, UAC of Nigeria Plc, Lafarge Africa Plc, Mutual Benefits Insurance Plc and CR Services (Credit Bureau) Plc with N58.9 billion, N49.7 billion, N500 million, N500 million, N15.4 billion, N131.7 billion, N2 billion and N500 million, raised.
In 2018, Flour Mills of Nigeria Plc, Fidson Healthcare Plc, May & Baker Nigeria Plc, Lafarge Africa Plc and Allianz Nigeria Insurance Plc raised N39.9 billion, N7.5 billion, N2.5 billion, N89.2 billion and N4.9 billion, via rights issue. Lastly, in 2019, only Sovereign Trust Insurance Plc raised capital via rights issue.
Why this matters: It is of common knowledge that a rights issue is a way for companies to raise capital. In this regard, capital is raised when existing shareholders pay for the new shares that are being issued.
Also according to the report, In 2018, four firms opted for private placement and raised N68.2 billion. They include Development Bank of Nigeria Plc, Providus Bank, Lagos Building Investment Company Plc and Consolidated Hallmark Insurance Plc with N60 billion, N6.5 billion, N1 billion and N734.5 million.
While Skyway Aviation Handling Company Plc was the only company to raise capital through an Initial Public Offering in 2018.