Custodian acquires 51% majority stake in UPDC

By Taofik Salako, Deputy Group Business Editor

Custodian Investment Plc has signed an agreement with UAC of Nigeria (UACN) Plc to acquire 51 per cent majority equity stake in UACN Property Development Company (UPDC) Plc, a publicly quoted real estate subsidiary of UACN.

The parties to the transaction said the agreement marks the beginning of a partnership between Custodian and UACN that will achieve companies’ objectives in the real estate industry. It was also described as a significant milestone that aligned with UACN’s strategy to focus on its core businesses.

The transaction include sale of 9.47 billion ordinary shares of UPDC held by UACN, representing 51 per cent of UPDC’s issued share capital to Custodian. The shares sale will be in two tranches with initial sale of 946.56 million shares, representing 5.10 per cent of the issued share capital of UPDC, on execution of binding transaction agreements. Then, subsequent sale of 8.52 billion shares, representing 45.90 per cent of the issued share capital of UPDC upon receipt of requisite approvals.

The completion of the sale is subject to regulatory approvals from the Nigerian Stock Exchange (NSE) and the Federal Competition and Consumer Protection Commission.

Group Managing Director, Custodian Investment, Wole Oshin said Custodian was excited about the possibilities arising from the partnership with UAC which provides multiple levers for value creation.

He said the rationale for the transaction was that Custodian and UAC share the view that their ambitions for capturing opportunity in the real estate industry will be better achieved working in partnership.

“UPDC is one of Nigeria’s leading real estate development companies, having completed several landmark residential and commercial developments over the past twenty years. This Transaction will provide Custodian with a platform to capture arising real estate opportunities. It also immediately provides recurring cash flow visibility and attractive yields as a result of its direct exposure to Nigeria’s leading real estate investment trust (UPDC REIT) with a track record of profitability and annual dividend distribution which offers a good compliment for our product portfolio,” Oshin said.

He expressed confidence that the recent recapitalisation of UPDC, significant reduction in finance costs, and recently reconstituted leadership have repositioned the company to operate sustainably and capture growth opportunities aimed at increasing stakeholder value going forward.