UPDC files application for fifteen billion shares rights issue

UACN Property Development Company Plc has taken another major step towards restructuring and re-invigoration through capital injection by way of a rights issue.

The company’s stockbroker, Stanbic IBTC Stockbrokers Limited, has submitted an application to the Nigerian Stock Exchange to undertake the exercise, according to a circular from the bourse dated Monday, September 30, 2019

In the proposed rights issue, the property development company, a part of the UAC Group, is offering its existing shareholders a total of 15,961, 563, 260 ordinary shares of N0.50 each at N1.00 per share.

The Nigerian Stock Exchange (NSE) also confirmed the exercise in a dispatch to dealers and the investing public. Lilian Dako, signed the notification on behalf of the Head, Listings Regulation Department, NSE.

“Dealing Members are hereby notified that UACN Property Development Company Plc (“UPDC”) has through its Stockbroker, Stanbic IBTC Stockbrokers Limited, submitted an application to The Nigerian Stock Exchange for the approval and listing of a Rights Issue of Fifteen Billion, Nine Hundred and Sixty-One Million, Five Hundred and Sixty-Three Thousand, Two Hundred and Sixty (15,961, 563, 260) ordinary sharesof Fifty Kobo (N0.50) each at One Naira (N1.00) per share, on the basis of forty-three (43) new ordinary shares for every seven (7) ordinary shares held.

“The Qualification Date for the Rights is today Monday, 30 September 2019”

 The UAC Group had on Monday, September 2, 2019 announced its recapitalization and restructuring plans, according to a statement signed by Mr. Godwin Samuel, UAC Company Secretary, and Mrs. Folake Kalaro, UPDC Company Secretary.

The plan is subject to approval by the Securities and Exchange Commission (SEC).

“UAC of Nigeria PLC and UACN Property Development Company PLC jointly announce recapitalization and restructuring plans. The Boards of Directors of UAC of Nigeria Plc (‘UAC”) and UACN Property Development Company Plc (“UPDC” or the “Company” (collectively the “Boards”, individually the “Board”) wish to inform The Nigerian Stock Exchange (“The Exchange” or “The NSE”), their shareholders and stakeholders that they are considering strategic initiatives involving a recapitalization and restructuring of UPDC. These initiatives are still subject to the review and approval of the Securities and Exchange Commission (the “SEC”), and The NSE (collectively the “Regulators”) and shareholders of both companies.

Specifically on UPDC, the statement further said the company would undertake: “An equity capital raise of N15.96 billion by way of a rights issue to repay its short-term debt obligations (“Rights Issue”). For UPDC to attain sustainability, the focus is on reducing outstanding debt to a level at which it is serviceable from recurring cash flows. This will require a significant cash injection which is to be raised through the Rights Issue. Post the Rights Issue, UPDC’s only interest-bearing obligation will be its long-term bond with total outstanding balance of N4.3 billion.