LASACO Assurance Plc has announced obtaining regulatory approvals to reverse its stock split of about 7,334,343,421 ordinary shares fully paid –up and issued at 50 kobo each, in the ratio one (1) new ordinary shares for every four (4) ordinary shares previously held by its shareholders.
This is according to a notification signed by the company’s secretary, Getrude Olutekunbi and sent to the Nigerian Stock Exchange Market, as seen by Nairametrics.
The decision of the firm to embark on the reverse stock split is sequel to a shareholders approval obtained at the 39th Annual General Meeting of the company held on the 8th of October 2019.
In a bid to efficiently reconstruct its shares, the firm announced that it will be doing the following;
- Suspend trading on the shares of LASACO for two weeks effective from February 1 to February 12, 2021.
- Close the register of shareholders for the aforementioned period to enable the Central Securities Clearing System (CSCS) and Apel Capital Registrars Limited to produce a new register for the company.
What this means: The reverse stock split is just a way of technically reducing the number of outstanding shares and increasing share price without affecting market value. In lieu of this, Nairametrics understands that the effective implementation of the reverse stock split will reduce the total number of LASACO outstanding shares to 1,833,585,855.25, while its share price will consequently increase to N2.00k.
What you should know:
- A Share Reconstruction otherwise known as a reverse stock split is a process whereby a company reduces the total number of outstanding shares it has by cancelling out shares it does not need.
- LASACO Assurance Plc had earlier projected a profit of N375.23 million for Q1 2021.
- The firm share price closed trading for the week at N0.42, down by 2.38%.