A combination of cost management, corporate relations, legal requirement and market situation is encouraging most companies to look inward to shareholders to fund their growth.Market Intelligence at the weekend indicated that more than 90 per cent of recent capital raising and prospective new equity issues were rights issue, a mode of issuance that primarily limits issuance to shareholders at a particular period.
“In addition, the new company’s Act, CAMA 2020, stipulates that before any existing shares can be issued to new investors, they should be issued to existing shareholders first unless they waive their rights to the issue of shares. This can only be done through rights issue,” Ademola said. He noted that companies also deploy rights issue as part of investor or corporate relations as the traditional discounted price of rights issue is seen as a way for the company to reward shareholders.
The Nigerian Exchange at the weekend indicated that it had approved proposal by Ellah Lakes to raise N2.9 billion from its existing shareholders. Ellah Lakes, a diversifying agro-allied company, plans a rights issue of one billion ordinary shares of 50 kobo each at N2.90 per share. The rights will be pre-allotted on the basis of one new share for every two held as at the close of business on Friday, February 10, this year.
Nigeria’s premier and largest non-interest bank, Jaiz Bank is undertaking a rights issue of about 5.41 billion ordinary shares of 50 kobo each at offer price of N1 per share, representing initial offer size of N5.4 billion. The rights issue will be pre-allotted on the basis of 87 new ordinary shares for every 250 ordinary shares held as at the close of business on Friday, October 6.
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Fonte: TheNationNews - 🏆 6. / 69 Consulte Mais informação »