By Taofik Salako, Capital Market Editor
RT Briscoe (Nigeria) Plc is finalising arrangements to raise new capital to pay its burgeoning debts and improve working capital as the automobile company struggles to stave off insolvency.
In a regulatory filing at the Nigerian Stock Exchange (NSE), the board of the company stated that it was finalising arrangements for an open-ended actively managed fund to raise funds from the capital market.
The net proceeds of the fund raising will be used to settle existing liabilities and increase working capital. The board believes that the new capital raising plan would lead to reduction and streamlining of the company’s current liabilities.
In the filing signed by Managing Director, RT Briscoe (Nigeria) Plc, the board noted that the new capital raising was also incidental to the recent appointment of a receiver for the company by the Asset Management Corporation of Nigeria (AMCON) to facilitate the repayment of some of the company’s bank debts.
According to the company, the receivership was designed to allow for unfettered business operations of the company under existing board and management, including the fulfilment of all pre-receivership contractual obligations.
The company assured all stakeholders that the current developments would not jeopardise the progress of the company as it continues to work for a brighter future.
RT Briscoe has struggled with declining sales, mounting debts, high finance costs and continuing negative bottom-line in recent years with external auditors expressing concerns over the going concern status and ability of the company to meet its continuous financial obligations.
Read Also: Union Bank raises N20b debt capital
Auditors had warned there could be material uncertainty on the future survival of RT Briscoe as the company technically lacks the ability to meet emerging financial obligations and working capital and its continuing survival depends on its bankers.
Key extracts of the audited report and accounts of RT Briscoe for the year ended December 31, 2018 showed that the company recorded a net loss of N2.29 billion in 2018 as against N3.16 billion in 2017.
Loss before tax also stood at N2.17 billion in 2018 compared with N3.14 billion. Gross profit had dropped from N971.46 million in 2017 to N1.46 billion in 2018. However, turnover rose from N4.38 billion in 2017 to N5.18 billion in 2018.
Incorporated in 1957 and listed on the Nigerian Stock Exchange in 1974, RT Briscoe (Nigeria) has evolved overtime from a truck-engine importer to become Nigeria’s most visible automobile company.
It had in recent years embarked on expansive diversification, which has seen addition of several emergent business lines to the dominant motors business.
RT Briscoe Group now consists of RT Briscoe, the automobile-dealing parent company; Briscoe Property Limited, its real estate subsidiary, Suites Resorts Limited, a leisure company that it acquired in 2012 and CAWS Technical Nigeria Limited, a wholly-owned subsidiary trading in industrial equipment.
RT Briscoe is owned by more than 43,000 Nigerian individual and institutional investors with only two major shareholders holding substantial shareholdings above five per cent.
Leave a Reply