The council of the Nigerian Stock Exchange (NSE) has approved the application by Trans-Nationwide Express (Tranex) Plc to raise about N238.58 million in new equity. The approval of the NSE is a prerequisite for any issuance by any quoted company.
Tranex is seeking to build up long-term capital to take advantage of emerging opportunities.
Tranex plans to raise the new capital from the existing shareholders. The company will float rights issue of 298.23 million ordinary shares of 50 Kobo each at 80 Kobo per share. The rights’ shares will be pre-allotted to existing shareholders on the basis of three new ordinary shares for every two ordinary shares held as at Wednesday, January 25, 2017.
With the approval of the supplementary new issue by the NSE, the Tranex board has secured the much-needed nod to complete the pre-offer process.
Many companies have turned to rights issue to recapitalise their operations in the face of lingering apathy in the primary market and the downtrend at the secondary market, which have made new share issue less attractive to new investors.
At the last count, not less than six companies have launched plans for rights issue as companies seek to deleverage and reduce debt financing in time of rising operational costs and declining sales. These companies include Guinness Nigeria, UACN Property Development Company, DN Meyer, Union Bank of Nigeria and Portland Paints and Products Nigeria.
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