Seplat Plc has announced that an exchange rate of N385.78/$1, will be used to determine its interim dividend payment of US$0.05 (United States Five Cents) per share to shareholders whose names appear on its Register of Members as at 13th November 2020.
This disclosure was made in a corporate announcement issued by the company’s Chief Financial Officer, Emeka Onwuka, which was made available on the website of the Nigerian Stock Exchange (NSE).
The management of the company advised in the document that shareholders that hold their shares on the NSE may elect to receive their entire dividend payment in Dollars, while shareholders on the London Stock Exchange (LSE) may elect to receive their entire interim dividend payment in GBP or USD Dollar.
In line with this, the company submitted that the following currency exchange rates would be applicable in the determination of the interim dividend payment to shareholders that qualify for and have elected to receive the Q3 2020 interim dividend payment in Naira or GBP.
Exchange Rate
1 USD = 385.78 Naira
1 USD = 0.7534 GBP
What you should know
However, the exchange rate for the Naira or Pounds Sterling amounts payable was determined by reference to the exchange rates applicable to the US dollar available on 12th November 2020.
The CBN official exchange rate currently stands at N379.5. Further checks by Nairametrics revealed that the Naira rate used is the FMDQ benchmark rate for foreign exchange spot operations in the Investors and Exporters FX Window (NAFEX).
What this means
It may be argued that the N385.78/US$ proposed by the company is a fair decision on the NSE shareholders, as the proposed exchange rate by the company, holds a fairly robust premium of N6.78/US$ for the shareholders when compared with the CBN rate of N379/US$ the day the decision was made.
However, when compared with the rate at the parallel market, which had opened and closed at N460/US$ on the day the decision was made – Friday 13th November, one may argue that shareholders would have wanted more in terms of currency conversion.
Viewed from the parallel market exchange rate angle, NSE shareholders may conclude that they lost N74.22 per US$ on the conversion.