In what is becoming part of the determination by quoted companies to ensure the once silent primary market of the Nigerian Stock Exchange (NSE) is kept busy till year end, two firms- Mutual Benefits Assurance and Lafarge Africa Plc, on Wednesday announced for their rights issues.
Both companies are seeking a total of N133.65bn, just as their qualification date is Wednesday, November 1, 2017.
Lafarge Africa Plc, according to an announcement by the Nigerian Stock Exchange (NSE) to dealing members through its stockbroker- Pilot Securities Limited, is applying for approval to raise N131.65bn through an offer of 3,097,653,023 ordinary shares of 50 kobo each at N42.50 per share. The new shares are expected to raise the company’s shares in issue to 8.6bn units post-offer.
The fresh capital is expected to help strengthen the company’s balance sheet and capital structure by reducing foreign currency exposure and optimizing the organization, while strengthening its expansion in Nigeria.
Lafarge, which announced a loss of N40.37bn last year, arising from foreign currency debt in a market in recession, returned to a pretax profit of N1.09bn in the first nine months of 2017 on lower volumes.
“We have returned to profits and … now we are investing in energy for next year that would further improve the performance,” Bruno Bayet told Reuters recently.
Parent firm LafargeHolcim is reportedly backing the capital raising exercise and is expected to subscribe to the offer, including converting its quasi-equity to ordinary shares.
Bayet said the company was looking at a debt position of below N200bn after the restructuring compared with around N225bn now.
The offer, according to Godstime Iwenekhai, Head, Listings Regulation Department at the NSE, is on the basis of five new ordinary shares for every nine held by shareholders.
Meanwhile, offer by Mutual Benefit Assurance Plc, through Security Swaps Ltd is to raise N2bn fresh capital through the offer of four billion ordinary shares of 50 kobo at 50 kobo per share, on the basis of one new share for every two units held as Wednesday, November 1, 2017.