The Nation Newspaper

Tag: UACN

  • UACN seeks regulatory approval to raise N15.4b new equity capital

    Nigeria’s oldest surviving business, UAC of Nigeria (UACN) Plc, has filed application for regulatory approval to raise about N15.4 billion as the conglomerate seeks to bolster its capital base to support its operations and other subsidiaries.

    A regulatory filing at the Nigerian Stock Exchange (NSE) indicated that UACN plans to raise N15.36 billion through a rights issue of 960.43 million ordinary shares of 50 kobo each at N16 per share. The new shares will be pre-allotted to existing shareholders on the basis of one new share for every two shares held as at the close of business on Thursday October 19, 2017.

    The proposed rights issue price of N16 is almost at par with the current market price of the conglomerate. UACN opens today at N16.11 per share.

    Shareholders of UACN had earlier approved the plan to raise new equity funds by selling new ordinary shares to existing shareholders.

    The board of directors of UAC of Nigeria (UACN) has said it was proposing raising about N15 billion from existing shareholders to recapitalise the existing businesses within the group and position the conglomerate to take advantage of emerging opportunities.

    Shareholders of UACN are expected to vote on three resolutions on the N15 billion rights issue at the forthcoming annual general meeting on June 14.

    In an explanatory statement on the proposed rights issue, the board of the conglomerate had stated that many subsidiaries within the group including three quoted companies- UACN Property Development Company, Livestock Feeds and Portland Paints and Products Nigeria, need working capital support to boost their operations and reduce dependence on costly bank loans.

    According to the board, it is important that the conglomerate is resourced to support the subsidiaries at the critical time.

    “In the prevailing environment of economic challenges and recession, there would also be opportunities for additional investment in current and adjacent categories that we play in,” the board stated.

    Directors of the conglomerate said they believed that the N15 billion rights issue would enable them to support the subsidiaries through these difficult times and provide the required flexibility to deepen the group’s position as opportunities for additional investments emerge in the chosen markets.

    The board urged shareholders to support the capital raising by passing the three resolutions and taking up their rights when the issue opens for subscription.

    At the meeting June 14, 2017 meeting, shareholders authorised the board to raise up to N15.4 billion by way of a rights issue, through the issuance of ordinary shares on such other terms and conditions as the directors may deem fit or determine.

    Also, in the an under-subscription of any rights issue undertaken by the company, shareholders voted to waive their pre-emptive rights to any unsubscribed shares under the rights issue, providing the board the authority to issue such shares to interested investors as far as practicable, on the same terms as the rights issue.

    Nigeria’s oldest surviving business, UACN started business in Nigeria in 1879, well ahead of the 1914 amalgamation that created the current Nigerian nation. The UACN Group consists of several active companies spreading through manufacturing, services, logistics and real estate sectors of the Nigerian economy. These include four quoted subsidiaries-CAP Plc, UACN Property Development Company (UPDC) Plc, Livestock Feeds and Portland Paints and Products Nigeria Plc; in addition to the parent company, UACN. UPDC Real Estate Investment Trust, which is also quoted on the NSE, is a subsidiary of UPDC.

    UACN acquired Livestock Feeds and Portland Paints in 2013. Other members of the group included UAC Foods Limited, UAC Restaurants Limited, MDS Logistics Plc, Warm Spring Waters Nigeria Limited, Grand Cereals Limited, and Unico CPFA Limited. Listed in 1974, UACN is owned by some 190,000 shareholders.

  • UACN eyes N6b for Livestock Feeds, UPDC

    UACN eyes N6b for Livestock Feeds, UPDC

    UAC of Nigeria (UACN) has opened application lists for supplementary capital raisings for two of its subsidiaries-Livestock Feeds Plc and UACN Property Development Company (UPDC), as the conglomerate launched a major bid to recapitalise its businesses.

    Livestock Feeds is seeking to raise about N750 million new equity funds from existing shareholders. Livestock Feeds is offering a rights issue of 1.0 billion ordinary shares of 50 kobo each at a price of 75 kobo per share. The rights issue has been pre-allotted on the basis of one new ordinary share for two ordinary shares already held by the shareholder.

    The rights issue’s price of 75 kobo per share however, represents about 15.4 per cent increase on the company’s opening market value of 65 kobo today at the Nigerian Stock Exchange (NSE).

    UPDC is seeking to raise about N5.16 billion new equity funds from its existing shareholders to reduce its debt burden and provide supportive capital for long-term growth.

    UPDC is offering a rights issue of about 1.72 billion ordinary shares of 50 kobo each at a price of N3 per share. The shares were pre-allotted on the basis of one new ordinary share for every one ordinary share held as at the qualification date. However, the rights issue price of N3 per share represents a premium of 71.4 per cent on UPDC’s opening market price of N1.75 at the start of trading today at the Nigerian Stock Exchange (NSE).

    The application lists for the two offers will run concurrently and are expected to close on Friday May 26, 2017.

    UPDC was spun off from UACN and its shares were listed on the NSE in 1997. UACN still holds the largest 46 per cent equity while First Trustees Nigeria holds the second largest stake of 12 per cent. Other corporate bodies hold some 18 per cent while individuals and trustees hold the balance of 24 per cent.

    UACN had last month closed application list another N1 billion rights issue for another subsidiary, Portland Paints and Products Nigeria (PPPN). PPPN floated a N1.02 billion rights issue by offering 600 million ordinary shares of 50 kobo each at N1.70 per share.

    Group Managing Director, UAC of Nigeria Plc, Mr. Larry Ettah, has said the new equity funds will be used to restructure balance sheet and support business expansion programme.

    “We will apply the planned rights proceeds to minimise the debt exposure risks of our business as well as carry out targeted expansion in our operations. The business will focus on its growth brands as well as make the necessary investment in marketing to improve its brands’ awareness and visibility,” Ettah said.

    Nigeria’s oldest surviving business, UACN started business in Nigeria in 1879, well ahead of the 1914 amalgamation that created the nation. The UACN Group consists of several active companies spreading through manufacturing, services, logistics and real estate sectors of the economy.

  • UACN launches mandatory takeover for Portland Paints

    UAC of Nigeria (UACN) Plc is launching a mandatory takeover bid to acquire additional equity stake in Portland Paints and Products Nigeria (PPPN) Plc.

    In June 2013, UAC of Nigeria (UACN) PLC, Nigeria’s largest conglomerate, had acquired the majority equity stake of 51 per cent in Portland Paints. Following the acquisition, the board and management of the company were reconstituted. Mr. Larry Ettah, who leads the management at UACN, became the chairman.

    In a regulatory filing at the weekend, UACN indicated that it will be launching a mandatory takeover of up to two million ordinary shares of 50 Kobo each in PPPN at N4.47 Kobo per share. The takeover price represents a premium of 224 per cent on PPPN’s market price of N1.38 at the Nigerian Stock Exchange (NSE).

    The qualification date for the transaction is Wednesday November 16, 2016, the date qualifying shareholders of PPPN will be determined.

    According to the report, qualifying shareholders are the shareholders of PPPN other than UACN whose names appear in the register of members of PPPN as at the qualification date and who are eligible to receive the takeover bid document.

    Ettah recently indicated that PPPN plans to raise new equity funds from existing shareholders to restructure its balance sheet and support its business expansion programme.

    Addressing shareholders, Ettah said the company had embarked on intensive restructuring of its operations in order to strengthen it against challenges that negatively impacted its operations in 2015.

    Ettah explained that PPPN embarked on restructuring as a result of the difficult and challenging economic and business environment in 2015.

    According to him, during the year, the company commenced a process of restructuring the business focusing on internal efficiencies and reviewing its route to market model in a bid to ensure that it builds a sustainable future for the business.

    “We will apply the planned rights proceeds to minimize the debt exposure risks of our business as well as carry out targeted expansion in our operations. The business will focus on its growth brands as well as make the necessary investment in marketing to improve its brands’ awareness and visibility,” Ettah said.

    He however noted that despite the challenges and risks posed by the business environment, the company with its flagship brand Sandtex, will continue to consolidate on the restructuring while seeking growth opportunities to deliver returns to the shareholders.

    Key extracts of the audited report and accounts of the company for the year ended December 31, 2015 showed that turnover dropped to N2.17 billion, 23 per cent lower when compared to the N2.8 billion in 2014. It recorded loss after tax of N233 million in 2015 as against N148.6 million recorded in 2014.

    PPPN- purveyor of the Sandtex brand of paints; was for several years a division of West African Portland Cement (Wapco) PLC, now Lafarge Cement Wapco Nigeria. With the division performing creditably well as a going concern, Wapco initiated the registration of the division as a limited liability company in 1985. Portland Paints became a publicly quoted company in July 2009. One of the most diversified paints manufacturing companies in Nigeria, Portland Paints manufactures and markets decorative, automotive, industrial and marine paints. It also holds sole agency for world-renowned sanitary brands including Armitage Shank, Ideal Standard and Jaquar.

     

     

  • UACN drives growth with internal funding

    UACN drives growth with internal funding

    After many failed attempts to raise new equity funds from existing and new investors, the board of UAC of Nigeria (UACN) Plc has suspended new equity issues and opted to finance ongoing restructuring and investments within the group with internally generated funds.

    At the annual general meeting of the company yesterday at Golden Tulip Festac, Lagos, chairman, UAC of Nigeria (UACN) Plc, Mr. Dan Agbor, said the group decided on internal funding after attempts to raise new equity funds from strategic investors and existing shareholders were frustrated by the slowdown at the Nigerian capital market.

    He said the group had sequel to approval by the shareholders at the annual general meeting in September 2015 made efforts to raise new equity funds, especially with a view to attracting a strategic investor or investors and obtain equity control that would be used to drive growth in certain subsidiaries.

    “Following your approval of a one for 12 rights issue of 160.07 million ordinary shares, your board and management made all necessary arrangements to launch the issue. Unfortunately, the weak performance of the Nigerian capital market has made it impossible to raise the requested capital on optimal terms and at the end of March 2016, a decision was taken by the board to discontinue the rights issue. Your board and management will now undertake the needed investment and financial restructuring of those subsidiaries using internally generated funds,” Agbor said.

    He added that the group decided to retain the larger part of its net earnings in 2015 to ensure that it remains in a position to participate in new equity issues that might be launched by its subsidiaries.

    According to him, the board had recommended total dividend of N1.92 billion for the 2015 business year while being mindful of the need to conserve funds so that the group can participate in the rights issues to be undertaken by three of its subsidiaries, including UACN Property Development Company Plc, Livestock Feeds Plc and Portland Paints & Products Nigeria Plc.

    Key extracts of the audited report and accounts of UACN for the year ended December 31, 2015 showed that group turnover dropped by 14.6 per cent from N85.6 billion in 2014 to N73.1 billion in 2015. Group profit after tax dropped by 52.6 per cent from N10.9 billion in 2014 to N5.2 billion in 2015.

  • Power accounts for 60% of costs, says UACN chief

    Managing Director, Gossy Natural Spring Water, a subsidiary of UACN, Mrs. Folake Oshinyemi has decried the huge cost electricity takes in the total cost of operation of manufacturers.

    She lamented that the firm spends between 40 and 60 per cent of its total costs on power generation, noting that it has impacted on the cost of the finished products.

    She said: “It’s ridiculous that the government wants us to pay for what we cannot claim to have used in a whole year. In the last one year, we have generated our own power in our factory in Ikogosi, Ekiti State.”

    Oshinyemi, who spoke to The Nation, regretted that Nigerians have been compelled to become a mini-local government as they now provide all their infrastruc-tural needs, such as roads, water, electricity and others.

    “Here, we generate our power, tar our roads and are made to pay taxes and levies; now they are increasing tariffs for power that is not supplied to us. The government should, therefore, ensure that the electricity distribution companies (DisCos) and the generation companies (GenCos) are effectively supported to ensure adequate power supply,” she added.

    On the effect of the foreign exchange policy, she said: “The forex policy has deeply affected our operations, but the truth is that as a nation, we badly managed our economy and our natural resources, especially oil. As we all know, the components of Gossy bottled water and the sachet water are all by-products of petrochemical products.

    “Unfortunately, we import resins which are a by-product of the petrochemical industry and whenever the cost of dollar is up, it affects us as manufacturers. Everything we use, apart from the water itself is imported, a serious country desirous of growing her economy cannot continue like this.

    “We are made to pay all manner of taxes; we pay company income tax, education tax, including withholding tax. In addition we are made to pay VAT (value added tax) on the materials that we use in making the water. In our local community where we function, our company is made to pay environmental premises levy.

  • UACN appoints new chairman, director

    UACN appoints new chairman, director

    UAC of Nigeria (UACN) Plc at the weekend announced the appointments of Mr Dan Agbor as the new chairman of the board of directors of the conglomerate and Engineer Okechukwu Mbonu as a non – executive director.

    The two appointments followed the resignation of the former chairman, Senator Udoma Udo Udoma and a non-executive director, Dr Okechukwu Enelamah, who were both recently appointed Ministers of the Federal Republic of Nigeria.

    Agbor, 55, is the managing partner of one of the leading commercial law firms in the country – Udo Udoma & Belo-Osagie. A seasoned lawyer, Agbor, who joined the firm in September 1990 until date, has had a distinguished practice in areas covering banking, mergers and acquisitions, private equity, finance, tax, and the laws relating to foreign investment.

    A former company secretary/legal adviser of Gulf Bank of Nigeria Limited, he worked variously at the corporate finance and legal departments of Citibank and as a Solicitor in the firm of Ajumogobia, Okeke & Oyebode, a Lagos-based firm of legal practitioners engaged in the general commercial practice of law.

    Agbor currently serves on the board of FSDH Securities Limited, FSDH Merchant Bank Limited; Pensions Alliance Limited and Swift Network Services Limited.

    Mbonu is a registered engineer, a Fellow of the Nigerian Society of Engineers (FNSE), a Fellow of the Nigerian Institution of Mechanical Engineers and a Fellow of the Sierra Leone Institute of Engineers. He is a Founding Partner of Execution Edge Limited, a company noted for the provision of management advisory services to medium and large scale business enterprises.

    Mbonu worked with Shell Petroleum Development Company Limited, Nigerian Breweries Plc, Heineken International and PricewaterhouseCoopers. While at Nigerian Breweries, he was appointed the Human Resource Director in 1999 and the Customer Service Director in 2001.

    In March 2005, he was posted to Heineken International and then to Sierra Leone Brewery Limited, Freetown as the Managing Director/Chief Executive Officer of the company.

    Mbonu attended Mayflower School, Ikenne where he obtained his West African School Certificate (WASC) with seven alpha distinctions and was awarded a Shell-BP Overseas scholarship to study Mechanical Engineering at the University of Manchester, UK, where he graduated in 1977 with a Bachelor of Science (B.Sc.) degree, with first class honours and four academic prizes.

    In 1978, on completion of his National Youth Service with Shell-BP, he was awarded the prestigious Manchester University Noel Philip Bedson Research Scholarship which in 1982 led to the award of a Ph.D. degree in Mechanical Engineering from Manchester University, UK.

    As part of his career development, Mbonu attended several local and international learning events including courses at Insead France; London School of Economics, UK; Stanford USA; Wharton School USA; IMD Switzerland and Heineken University, The Netherlands.

  • UACN appoints new chairman, director

    •Agbor
    •Agbor

    UAC of Nigeria (UACN) Plc at the weekend announced the appointments of Mr Dan Agbor as the new chairman of the board of directors of the conglomerate and Engineer Okechukwu Mbonu as a non – executive director.

    The two appointments followed the resignation of the former chairman, Senator Udoma Udo Udoma and a non-executive director, Dr Okechukwu Enelamah, who were both recently appointed Ministers of the Federal Republic of Nigeria.

    Agbor, 55, is the managing partner of one of the leading commercial law firms in the country – Udo Udoma & Belo-Osagie. A seasoned lawyer, Agbor, who joined the firm in September 1990 until date, has had a distinguished practice in areas covering banking, mergers and acquisitions, private equity, finance, tax, and the laws relating to foreign investment.

    A former company secretary/legal adviser of Gulf Bank of Nigeria Limited, he worked variously at the corporate finance and legal departments of Citibank and as a Solicitor in the firm of Ajumogobia, Okeke & Oyebode, a Lagos-based firm of legal practitioners engaged in the general commercial practice of law.

    Agbor currently serves on the board of FSDH Securities Limited, FSDH Merchant Bank Limited; Pensions Alliance Limited and Swift Network Services Limited.

    Mbonu is a registered engineer, a Fellow of the Nigerian Society of Engineers (FNSE), a Fellow of the Nigerian Institution of Mechanical Engineers and a Fellow of the Sierra Leone Institute of Engineers. He is a Founding Partner of Execution Edge Limited, a company noted for the provision of management advisory services to medium and large scale business enterprises.

    Mbonu worked with Shell Petroleum Development Company Limited, Nigerian Breweries Plc, Heineken International and PricewaterhouseCoopers. While at Nigerian Breweries, he was appointed the Human Resource Director in 1999 and the Customer Service Director in 2001.

    •Enalamah
    •Enalamah

    In March 2005, he was posted to Heineken International and then to Sierra Leone Brewery Limited, Freetown as the Managing Director/Chief Executive Officer of the company.

    Mbonu attended Mayflower School, Ikenne where he obtained his West African School Certificate (WASC) with seven alpha distinctions and was awarded a Shell-BP Overseas scholarship to study Mechanical Engineering at the University of Manchester, UK, where he graduated in 1977 with a Bachelor of Science (B.Sc.) degree, with first class honours and four academic prizes.

    In 1978, on completion of his National Youth Service with Shell-BP, he was awarded the prestigious Manchester University Noel Philip Bedson Research Scholarship which in 1982 led to the award of a Ph.D. degree in Mechanical Engineering from Manchester University, UK.

    As part of his career development, Mbonu attended several local and international learning events including courses at Insead France; London School of Economics, UK; Stanford USA; Wharton School USA; IMD Switzerland and Heineken University, The Netherlands.

     

  • UACN hails appointment of Udoma, Enelamah as ministers

    UACN hails appointment of Udoma, Enelamah as ministers

    Nigeria’s most diversified and oldest conglomerate, UAC of Nigeria (UACN) Plc has commended the appointment and confirmation of two of its non-executive directors- Senator Udoma Udo Udoma and Dr Okechukwu Enelamah, as ministers in President Muhammadu Buhari’s cabinet.

    The Senate last week cleared Udoma and Enelamah, after they had been screened and found worthy by the National Assembly. Both were among the ministerial nominees forwarded to the National Assembly by President Buhari for confirmation.

    Udoma, an accomplished lawyer and two-time Senator of the Federal Republic of Nigeria, joined the board of UACN in 1995 and was appointed as the non-executive chairman of the board with effect from January 2, 2010. Udoma is also the non-executive chairman of Union Bank Plc and serves on the board of Unilever Nigeria Plc.

    Enelamah, who joined the UAC Board in 2010, first graduated as a medical doctor before qualifying as a chartered accountant. He has an MBA from the prestigious Harvard Business School, Massachussetts, USA and is also a chartered financial analyst. He is the chief executive officer of African Capital Alliance Limited (ACA), a leading private equity firm.

    Group managing director, UAC of Nigeria, Mr Larry Ettah, UAC of Nigeria (UACN) Plc, at the weekend said the appointments further highlighted the long-standing contribution of UACN to national development and the depth of quality of the conglomerate’s human capital.

    According to him, at UAC, the directors will no doubt be missed but Nigeria’s gain will not be UAC’s loss but its donation as a responsible corporate citizen of men of consummate talent and good stewards of capital to the stand out performance that is required to build a new Nigeria and a more enabling commonwealth for all citizens – both individual and corporate.

    “Their appointment is a further validation that UAC, as reflected in its history, remains an incubator of national leadership, integrity, character and service,” Ettah said.

    In the past, Chief Ernest Shonekan was appointed as the Head of the National Interim Government and Commander-in-Chief of the nation’s Armed Forces and Late Mr Isaac Aluko-Olokun was appointed as Minister of National Planning. Both were serving UACN senior managers when they were called up for national service.

    Udoma, founding Partner of Udo Udoma & Belo-Osagie, a foremost legal firm in the country, has served the nation in very many capacities. He was the pioneer chairman of the Corporate Affairs Commission; non-executive chairman of the board of the Securities & Exchange Commission (SEC) and was also chairman of the Task Force on the Petroleum Industry Bill.

  • Why we need additional capital, by UACN

    Why we need additional capital, by UACN

    UAC of Nigeria (UACN) Plc plans to use the net proceeds of its proposed multi-level capital raising programme to finance business expansion and deleverage existing businesses with a view to optimise the conglomerate’s businesses.

    Shareholders of UACN last week approved several capital raising proposals proposed by the board, paving the way for the board to engage professional parties and continue the new issue process.

    Chairman, UAC of Nigeria (UACN) Plc, Senator Udoma Udo Udoma, told shareholders that the company needed new capital to finance its expansion and reduce indebtedness.

    According to him, the group is currently realigning its portfolio and making strategic shifts where necessary while it has also been selectively expanding its capacity to meet customer demand in its logistics operations.

    He said the capital raising was in pursuit of plans to improve returns and address the high leverage position in UACN Property Development Company (UPDC), the real estate subsidiary, and Portland Paints as well as to provide capital for expansion in the Feeds and Logistics businesses and other business expansion plans.

    He said while the directors of the company recognised that the task ahead may not be easy, the board and management are determined to take advantage of the opportunities in the economy to deliver the corporate goals for 2015.

    Key extracts of the audited report and accounts of UACN for the year ended December 31, 2014 showed that the conglomerate recorded a modest top-line growth of nine per cent from N78.7 billion in 2013 to N85.7 billion in 2014 while profit before taxation was N14.1 billion compared to N13.9 billion of 2013. Shareholders at the meeting approved the distribution of N3.3 billion as cash dividends for the 2014 business year. Shareholders would receive a dividend per share of N1.75.

    He outlined that in order to further consolidate on its technology improvement initiative, capacity and efficiency in operations, three new plants were commissioned including a new Feed mill at the Ikeja plant of Livestock Feeds Plc, an automated Pie line for the Restaurants business and a new processing and packaging technology for Supreme Ice cream.

    He noted that in 2014, in line with the company’s vision to be number one in its chosen markets, UACN Group achieved market leadership with its Vital Fish feed brand, which was introduced just three years ago.

    He pointed out that as part of the business transformation process, the company has fully implemented both the new SAP enterprise resource software across the group and the Enterprise Risk Management framework to enhance the control environment of its business.

    He added that the group has already started seeing value from the outsourcing of its internal audit function and whistle blowing mechanism, key initiatives that have strengthened corporate governance at all levels of the business and in the group’s joint-venture operations.

    The Nation’s check indicated that UACN might raise as much as N40 billion in the multi-level capital issue.

    Besides, the board of the conglomerate is also considering new equity funds through a rights issue to existing shareholders. Shareholders approved several resolutions including one that empowers the board to raise N20 billion through any means of capital raising and another resolution that mandates the board to offer some 160.07 million ordinary shares of 50 kobo each to existing shareholders on the basis of one new ordinary share for every 12 shares held as at the closure date.

    In a major strategic move, the conglomerate is seeking to undertake a private placement of 230 million convertible non-redeemable preference shares of 50 kobo each to pre-identified investors at a price of N45 per share.

    In another private placement, the meeting approved a proposed private placement of 100 million convertible non-redeemable preference shares of 50 kobo each to pre-identified investors at a price of N50 per share.

    Under the proposed terms of private placement, the preference shares shall be convertible to ordinary shares within five years on terms to be agreed by the directors. The preference shares holders would not be entitled to dividends but they would be entitled to any distribution of assets and they can attend general meeting and vote as well.

    According to the proposed terms of the rights issue, rights that were unsubscribed would be allotted and sold to other investors.

    To facilitate the new capital issue, shareholders increased the conglomerate’s authorised share capital from N1 billion divided into 2.0 billion ordinary shares of 50 kobo each to N1.7 billion, consisting of 3.0 billion ordinary shares of 50 kobo each and 400 million preference shares of 50 kobo each.

    Nigeria’s oldest surviving business, UACN started business in Nigeria in 1879, well ahead of the 1914 amalgamation that created the current Nigerian nation. A large group of several active companies spreading through manufacturing, services, logistics and real estate sectors of the Nigerian economy, the UACN Group includes four quoted subsidiaries-CAP Plc, UACN Property Development Company (UPDC) Plc, Livestock Feeds and Portland Paints and Products Nigeria Plc; in addition to the parent company, UACN. UPDC Real Estate Investment Trust is a subsidiary of UPDC.

    UACN acquired Livestock Feeds and Portland Paints in 2013. Other members of the group included UAC Foods Limited, UAC Restaurants Limited, MDS Logistics Plc, Warm Spring Waters Nigeria Limited, Grand Cereals Limited, and Unico CPFA Limited. Listed in 1974, UACN is owned by some 190,000 shareholders.

  • 18 firms raise N225.3b bonds in eight years

    18 firms raise N225.3b bonds in eight years

    In the rush to raise corporate bonds, 18 companies have issued N225.38 billion corporate bonds in eight years in 23 deals.

    According to documents accessed from the Debt Management Office (DMO) by The Nation, UBA Plc issued the largest bond value in two installments of N20 billion in 2010 and N35 billion in 2011. Both bond insurances had 13 and 14 per cent coupon values with seven years’ maturity date.

    Flour Mills of Nigeria Plc issued the single largest corporate bond worth N37.5 billion. The bond, which was issued in 2010, had a coupon value of 12 per cent with five years tenure thus putting its year of maturity at 2015.

    The Federal Mortgage Bank of Nigeria (FMBN) did not want the private sector to  overrun the corporate bonds market, so in 2012 it issued a N30.56 billion bond with a 17.25 coupon and five years’ maturity tenor.

    Others in the elite 23 corporate bonds issuers between 2005 and 2013 were Acess bank (N1.9 billion), Crusader Nigeria Plc (N4 billion), Custodian and Allied Insurance Plc (N1.17 billion), C and I Leasing Plc (N2.24 billion and N0.94 billion), Guaranty Trust Bank Plc (N13.17 billion), NGC Sterile (N2 billion), UACN Property Development Company Plc (N15 billion).

    Chellarams Plc issued (N1.5 billion and N0.54 billion) corporate bonds in 2010 and 2012; Dana Group (N8.01 billion), Sterling Bank (N7.5 billion), Lafarge/WAPCO Nigeria Plc (N11.88 billion), Nigeria Aviation Handling Company Plc (N15 billion and N2.05 billion), Tower Funding (N4.63 billion), Crusader Insurance (N2.26 billion, zero coupon), First Securities Discount House (N5.53 billion) and La Casera (N3 billion).

    On the other hand, six banks issued Corporate Eurobonds in the International Capital Market (ICM) valued at $3.4 billion between January 2011 and this month.

    Some of the banks are Guaranty Trust Bank ($500 million and $400 million), Access Bank ($350 million and $400 million), Fidelity Bank ($300 million), Zenith Bank ($500 million), Diamond Bank ($200 million) and First Bank ($450 million and $300 million).