Ellah Lakes, at its Annual General Meeting (AGM) held on December 5, 2024, in Victoria Island, Lagos, Nigeria, received approval from shareholders for the conversion of the company’s outstanding debt into equity.
The resolution to convert Ellah Lakes’ outstanding debt into ordinary shares, along with other agenda items, was disclosed on the Nigerian Exchange (NGX) on December 9, 2024, and signed by the company secretary, OAKE Legal.
Ellah Lakes has a substantial outstanding loan balance of N658 million with the Central Bank of Nigeria (CBN) and First City Monument Bank (FCMB), part of a N940 million loan under the CBN’s Oil Palm Plantation Development Programme.
According to the disclosure, the conversion will be subject to specific terms and conditions determined by the Board of Directors, pending necessary regulatory approvals.
Additionally, the Board of Directors approved an increase in the company’s share capital, stating: “That the share capital of the Company be and is hereby increased to such amount as may be determined by the Board of Directors, ranking pari passu in all respects with the existing ordinary shares of the Company.”
The AGM also covered regular business matters, including the appointment and reelection of directors, the appointment and remuneration of new auditors, and the reelection of shareholders to the statutory audit committee.
Increase in share capital
At the Annual General Meeting, shareholders approved converting the company’s outstanding debt into ordinary shares, subject to terms set by the Board of Directors and necessary regulatory approvals. Additionally, shareholders ratified all actions taken by the Board and management in relation to this debt conversion process.
- As a result of this approval, the company’s share capital was increased, and new shares were issued amid the conversion of the outstanding debt.
- In line with these changes, the company’s Memorandum of Association was amended to accurately reflect the updated capital structure.
- In a further strategic move, the company also decided to revise its financial year.
- The fiscal year will now follow a calendar cycle, shifting from the previous period of August 1 to July 31, to a new cycle running from January 1 to December 31.
Consequently, the current financial year was extended to 17 months, covering the period from August 1, 2024, to December 31, 2025.
Backstory
Ellah Lakes Plc recently disclosed a net loss of N893.9 million for the year ending July 2024, highlighting the financial challenges confronting the company despite its ambitious growth objectives.
- This comes amid a recent report by Nairametrics revealing that CBO Capital, one of Ellah Lakes’ largest shareholders has sold 81 million of its shares in the company. The shares were sold in two tranches: 79 million at N3.67 per share and 1.4 million at N3.75 per share.
- While the identity of the buyer remains undisclosed, the divestment is in line with CBO Capital’s earlier statement from July, in which it outlined plans to transfer part of its holdings to shareholders and creditors to fulfill outstanding obligations.
- Faced with revenue challenges and rising operational costs, Ellah Lakes is moving forward with plans for a capital injection to stabilize its finances.
- In March 2024, the company’s Board approved a private placement to raise funds and notified the Securities and Exchange Commission (SEC) about an upcoming investment from a core investor.
Additionally, the conversion of outstanding debt into ordinary shares and the company’s plans to raise share capital are part of broader efforts to secure necessary capital and strengthen shareholder confidence.
Appointments, elections, and re-elections
Also at the Annual General Meeting, shareholders approved the company’s audited financial statements for the fiscal year ending July 31, 2024, along with the reports from the directors, auditors, and the audit committee.
- Additionally, shareholders ratified the re-election of Messrs. Joe Attueyi, Evans Jakpa-Johns, Maxwell Oko, and Enotie Ogbebor as directors and approved the appointments of Mr. Kofo Majekodunmi and Mr. Emmanuel Jakpa to the board.
- The meeting also confirmed the appointment of Messrs. Olabode Akande & Co. as the company’s auditors for an extended period of seventeen months, from August 1, 2024, to December 31, 2025, with the board authorized to set their remuneration.
- In addition, shareholders elected Mr. Olugbosun Banji, Mr. Makanjuola Oladayo Abdulyekini, and Mr. Okoahaba Emmanuel Ifeanyi to the Statutory Audit Committee, alongside directors Ms. Osaro Oyegun and Ms. Nnenna Onyewuchi.