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Capital Market

ABC Transport Plc Plans to Raise N1.27 Billion Via Rights Issue

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ABC Transport Plc

ABC Transport Plc, a Nigerian leading transport company, has proposed to raise an additional N1,127,236,000 via way of a rights issue, the company disclosed a statement filed with the Nigerian Exchange Limited.

ABC Transport through its Stockbroker, FSL Securities Limited, has submitted an application to the Nigerian Exchange Limited for approval and listing of One Billion, One Hundred and TwentySeven Million, Two Hundred and Thirty-Six Thousand (1,127,236,000) Ordinary Shares of Fifty Kobo (N0.50) each at Thirty-Five Kobo (N0.35) per share, on the basis of sixty-eight (68) new ordinary shares for every one hundred (100) ordinary shares held.

The qualification date for the rights issue was Tuesday, 30 November 2021.

What is Rights Issue

A Rights Issue or Rights Offer is a privilege given to existing shareholders of a company to buy additional shares in the company.

It is an invitation to existing shareholders to purchase additional new shares in the company. This type of issue gives existing shareholders securities called rights. With the rights, the shareholder can purchase new shares at a discount to the market price on a stated future date. The company is giving shareholders a chance to increase their exposure to the stock at a discount price.

Key Takways

  • A rights issue is one way for a cash-strapped company to raise capital often to pay down debt.
  • Shareholders can buy new shares at a discount for a certain period.
  • With a rights issue, because more shares are issued to the market, the stock price is diluted and will likely go down.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Capital Market

Share Buyback: Dangote Cement Repurchased N35 Billion Worth of Shares

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Dangote Cement Plc has completed the second tranche of its share repurchase programme announced on January 12 January 2022.

The company commenced the share repurchase on Wednesday, 19 January 2022 through open market mode on the Nigerian Exchange Limited and completed it on Thursday, 20 January 2022.

Dangote Cement repurchased 126,748,153 shares or 0.74 percent of the company’s issued and fully paid ordinary shares. At an average price of N276.89 a unit, the company spent N35.095 billion on the repurchase.

This was contained in a statement signed by Edward Imoedemhe, Deputy Company Secretary, Dangote Cement Plc.

The statement read in part, “Following the conclusion of Tranche II, the total number of residuals issued and fully paid outstanding shares of DCP amounts to 16,873,559,251. The repurchased shares will be held as treasury shares and may subsequently be cancelled.

“Execution of this Tranche II did not have any material impact on the Company’s financial position.”

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Capital Market

BUA Foods Crosses N1 Trillion Market Value in Four Days

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BUA Foods Plc, the newly listed arm of BUA Group, on Monday hits N1.053 trillion market capitalisation just four days after it was listed on the Nigerian Exchange Limited (NGX).

BUA Foods listed 18 billion ordinary shares at N40 a unit on the main board of NGX on Wednesday 5, 2022. At N40 per share, BUA Foods’ market capitalisation was N720 billion. However, because of its attractiveness to both local and foreign investors, the stock rose by over 20 percent in the first two trading days to N48.4 per unit.

Demand for BUA Foods continues as investors scooped 204,599,864.00 on Friday, bolstering the price to N53.2 a unit. On Monday, another 101,356,308 shares were traded at N58.5 to increase market capitalisation to N1.053 trillion from N720 billion it was listed just four trading days ago.

The company has now added N1.05 trillion to NGX liquidity in line with the Exchange projection. “It is expected that this listing will also increase the visibility of the food manufacturing, processing, and distribution company, BUA Foods, to investors on the African continent and across the globe.,” stated NGX.

BUA Foods Plc presently focuses on cultivating, processing, manufacturing, producing, mixing, packing, preserving, extracting, refining, importing, exporting, buying, selling, trading, and dealing in all kinds of foods, consumables, food materials or derivatives as well as raw materials for making all kinds of foods, food products and ingredients for making any kind of foods and consumables.

BUA Foods was created in November 2021 following a restructuring by way of a scheme under Section 711 of CAMA (the “Restructuring”) among BUA Sugar Refinery Limited (“BUA Sugar Refinery”), IRS Flour Mills Limited, IRS Pasta Limited, BUA Rice Limited, BUA Oil Mills Limited, and BUA Foods Limited (the “Entities”), further to which BUA Sugar Refinery (a private limited liability company, incorporated on 13 April 2005 and commenced business operations in September 2008) emerged as the surviving entity. As part of the Restructuring, the name of the enlarged entity was changed to BUA Foods with its operations reorganised into five business divisions: Sugar, Flour, Pasta, Rice and Edible Oils. In December 2021, the Company was converted into a public limited liability company. BUA Foods is affiliated with diverse group companies under the BUA brand that span the food and infrastructure sectors.

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Capital Market

Lagos Ranked Top Destination Of Capital Investment As Importation Value Rises By 97% In Q3’21

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Lagos

Lagos state remains the top destination of capital investment in Nigeria in the third quarter (Q3) of 2021 with $1,481.58 million accounting for 85.57 percent of total capital investment in the country.

In second place is the Federal Capital Territory (FCT), Abuja with investments valued at $249.19 million (14.39%).

According to the Capital Importation Report for Q3’21 recently released by the National Bureau of Statistics (NBS), the total value of capital importation into Nigeria in the third quarter of 2021 stood at $1,731.37 million from $875.62 million in the preceding quarter of 2021, showing an increase of 97.73%.

When compared to the corresponding quarter of 2020, capital importation as well increased by 18.4 percent from $1.46 billion.

The report also revealed that the largest amount of capital importation by type was received through Portfolio investment, which accounted for 70.30% ($1,217.21 million) of total capital importation. This was followed by Other Investment which accounted for 23.47% ($406.35 million) and Foreign Direct Investment (FDI) amounted to 6.23% ($107.81 million) of total capital imported in Q3 2021.

By Sectors, capital importation into financing had the highest inflow of $469.17 million amounting to 27.10% of total capital imported in the third quarter of 2021. This was closely followed by capital imported into the Banking Sector valued at $460.39 million (26.59%) and Production sector $323.83 million (18.70%).

“Capital Importation by country of origin revealed that the United Kingdom ranked top as source of capital imported into Nigeria in the third quarter of 2021 with a value of $709.8 million accounting for 40.99% of total capital imported in the period under review. This was followed by capital imports from South Africa and United States of America valued at $389.54 million (22.50%) and $257.12 million (14.85%) respectively”, the NBS said in its report.

Also, Stanbic IBTC Bank Plc ranked highest in Q3 2021 with $537.92 million (31.07%) of total capital investment in Nigeria. This was followed by Standard Chartered Bank (18.83%) and Citibank Nigeria Limited (14.34%).

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