Ellah Lakes Plc has announced it has received approval from the Securities and Exchange Commission (SEC) to raise an additional N2.90 billion capital via the rights issue.
The company disclosed this via an official statement sent to Nigeria Exchange Limited (NGX).
What the company is saying
According to the statement signed by OAKE Legal (Company Secretary), Ellah Lakes is proposing a Rights Issue of 1,000,000,000 Ordinary Shares of 50 Kobo each at N2.90 Per Share which brings the total value of the capital to N2.90 billion.
However, the rights issue is subject to the approval of regulatory authorities.
Here’s an excerpt from the statement:
- Ellah Lakes Plc (the Company) is pleased to notify its esteemed Shareholders, Stakeholders, Nigerian Exchange Limited (“The Exchange”) and the general public, that the Company has obtained approval from the Securities Exchange Commission (“SEC” or the “Commission”) to conduct the signing ceremony with regards to the proposed Rights Issue of 1,000,000,000 Ordinary Shares of 50 Kobo each at N2.90 Per Share, based on one (1) new ordinary share for every two (2) ordinary shares held.
- The Qualification Date for the Rights Issue is 10th February 2023.
- Subject to the approval of the executed offer documents by the SEC, the application list is expected to open on the 9th of October 2023, or any other date approved by the Commission and shall open for a maximum period of 28 days.
- Rights circular will be distributed to shareholders while application forms will also be made available on the website of the company’s Registrars for ease of access.
- Esteemed shareholders are advised to contact their stockbrokers and other financial advisers for more details of the offer.
What Rights Issue means
A rights issue is an invitation to existing shareholders to purchase additional new shares in the company. This type of issue gives existing shareholders the “right” to purchase new shares at a discount to the market price on a stated future date.
However, shareholders are not obligated to exercise this right.
In this regard, the company may decide to use the additional capital raised from these offerings to existing shareholders to acquire assets, make a takeover, repay debts or save itself from bankruptcy.
This is expected to strengthen the company’s balance sheet, and free up capital for the management to execute revenue, and profit-optimizing projects, plans, and strategies.
Is Ellah lakes a going concern -what exactly are they doing now?