C & I Leasing extends N3.23b rights issue
C & I Leasing Plc at the weekend extended the offer period for its ongoing rights issue of N3.23 billion, giving shareholders additional 17 days to pick up their rights. Application list for the rights issue had opened on Monday November 18, 2019 and was scheduled to close on Friday, December 27, 2019.
Head, Listings Regulation Department, Nigerian Stock Exchange (NSE), Godstime Iwenekhai stated that trading in the rights on the NSE has also been extended in line with the extension of the offer period.
C & I Leasing is seeking to raise N3.23 billion from existing shareholders through a rights issue of 539 million ordinary shares of 50 kobo each at N6 per share. The rights were pre-allotted on the basis of four new ordinary shares of 50 kobo each for every three ordinary shares of 50 kobo each held as at the close of business on Wednesday, September 04, 2019.
The company would use the net proceeds of the offer to bolster its working capital and increase leasing assets.
AbraaJ Investment Management Limited (AIML), which had secured approval to convert its $10 million loan in C & I Leasing to equities in the Nigerian leasing company, and thus became a majority shareholder, has indicated that it will not be picking its rights. Renounced rights are usually sold through trading on the NSE or through pro rata allocation to other shareholders that demand for additional shares.
C & I Leasing had in January 2019 concluded a massive share reconstruction that saw cancellation of 1.479 billion ordinary shares of 50 kobo each, about 79 per cent of the company’s pre-consolidation issued share capital.
The share capital reconstruction had reduced the leasing company’s outstanding shares from 1.883 billion ordinary shares of 50 kobo each to new total outstanding ordinary shares of 404.25 million ordinary shares of 50 Kobo each. Under the share consolidation, four ordinary shares of 50 kobo each were consolidated into one ordinary share of 50 kobo each.
The company had stated that the purpose of the reconstruction was to allow the company to have enough unissued shares to accommodate the conversion of the Abraaj loan stock to ordinary shares and to raise additional capital through the capital market for business expansion.
The offer period coincided with the discovery of a financial error in the financial statement of the group’s Ghana subsidiary. The board of the company however, stated that it did not envisage that the financial error will have any material impact on the rights issue.
C & I Leasing had launched special investigation to unravel the causes and the exact amount of a financial error in the audited accounts of its Ghana subsidiary, Leasafric Ghana Limited (Leasafric). Leasafric Ghana accounts for 10 per cent of the C & I Leasing Group’s financial performance.
The board of C & I Leasing stated that Leasafric Ghana had informed the parent company of likely financial error in its audited accounts. The board stated that ongoing investigations will unravel the circumstances surrounding the likely errors in the audited accounts.
C & I Leasing holds the majority 71 per cent equity stake in Leasafric, a non-bank financial institution incorporated in Ghana in 1992 to carry on the business of finance leasing as its principal business.
The company stated that while the exact amount to be written off will be determined by the ongoing investigations, there could be likely impact on its group’s profit target for 2019.
According to the company, in spite of the likely impact on profit target for 2019, exceptional track record in major sectors of
the economy will cushion any effect going forward and it expects to meet its profit targets for 2020 and beyond.
C & I Leasing assured stakeholders and the investing public that it remains resilient and well diversified to cushion any likely impact of the financial error.
“The company has also begun putting adequate measures in place and strengthening its existing risk controls framework to prevent a recurrence,” C & I Leasing stated.
The company noted that the detection of the financial error was as a result of the effective implementation of its robust corporate governance framework which is closely monitored by the board adding that it remains committed to ensuring the continued full and effective implementation of the framework.