C&I Leasing Plc, a leading leasing and ancillary services conglomerate, has disclosed that the proceeds of its on-going N3.2billion Right Offer would be used to increase its investment in the marine business.
Managing Director and Chief Executive Officer (MD/CEO), Andrew Otike-Odibi, explained that the offer, which is 539,003,333 ordinary shares of 50 kobo each at N6.00 per share on the basis of four (4) new ordinary shares for every three (3) held, is being undertaken as part of the long-term plan to strategically position the company for sustainable growth.
He added that it is tradable and therefore open to non-existing shareholders, who are willing to buy shares in the company.
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Why it matters: A comparison of the current market price of C&I Leasing, which stood at N7.3 on Sept 12th 2019, and the offer price of N6 for the rights, shows that the rights are being issued at a discount of N1.73.
Not only is the C&I Leasing rights presenting a better offer in terms of pricing, it is also rewarding in terms of the number of shares that existing shareholders are getting.
Subscribing to the C&I Leasing rights offer will entail that a shareholder will be paying N24 for 4 additional shares that are worth N29.2 in the market, which is a gain of N1.3 per share. It means the C&I Leasing rights offer makes more economic sense.
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Going by the facts behind the offer, investors are advised to buy the C&I Leasing shares at N6, which they can profitably sell at the market for more than that, possibly at N7.3 or more.
Otike-Odibi said, “The rights issue is the first step into our medium to long term capital restructuring plan. This will give our existing shareholders some advantage in terms of shareholding and the value of the shares.
“If we’re going to do a public offer, we probably would do it at a premium above what we are currently coming to the market with and also it will be open to external investors who have not been in the business for some time, so this is like the second step in the journey because we did a bond issuance last year which was successful and now we’re doing an equity raise through a rights issue.”
Meanwhile, the capital raised from the rights issue would be used to refinance some of the company’s debts while the rest would be used for expansion into the marine business as the company seeks to invest heavily in this sector.
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“Part of the proceeds from the rights issue will be to refinance some of our debts and the rest of it will be for business expansion. We’ve invested heavily in the marine business and will continue in these investments because of the opportunities in that area so part of that money will go into growth in the marine business where we will buy new vessels,” Andrew Otike-Odibi said.
Meanwhile, the capital raised from the right issue would be used to refinance some of the company’s debts and the rest used for expansion into the marine business as the company seeks to invest heavily in this sector.
“Part of the proceeds from the rights issue will be to refinance some of our debts and the rest of it will be for business expansion. We’ve invested heavily in the marine business and will continue in these investments because of the opportunities in that area so part of that money will go into growth in the marine business where we will buy new vessels.
“C&I Leasing is committed to the well-being of its shareholders and stakeholders in general and is intentional about prioritizing their interests. The offer opened on Monday 18th of November 2019 and will close on Friday 27th of December 2019,” Andrew Otike-Odibi said.
About C&I Leasing
C & I Leasing Plc is listed on the Nigerian Stock Exchange and engages in the business of fleet management, auto distribution, and marine rental/leasing. The company also offers escort services, fire-fighting services, pollution control services, mooring support services, recruitment/HR consultancy services, among others. It was incorporated in December 1990 and listed on the NSE in December 1997.
