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DEAP Capital to raise fresh funds

Category: Public Offers Private Placements


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DEAP Capital to raise fresh funds

-seek Core/Institutional investors

 

 

Peter OBIORA

Proshare NI

February 26, 2009 at 15:50 GMT

 

 

DEAP Capital Management & Trust Plc (DEAP), playing in the Other Financial Institutions Sector of the Nigerian Stock Exchange (NSE) is seeking to raise fresh funds and has plans to get a Core/Institutional Investors on the Board of the Company.

 

Proshare NI gathered that the company is proposing to raise the funds through an Issue of Convertible Bonds, with discretion to do preferential allotment to a Core/Institutional Investors.

 

Chief Sylvanus Ezendu, Chairman of the DEAP confirmed this at the company’s sixth Annual General Meeting (AGM) held today in Lagos Nigeria.

 

From the Special Resolution at the AGM, the Board of Directors (BOD) of the company has been authorised to raise fresh funds on behalf of the Company via an Issue of convertible Bonds with discretion to do preferential allotment to a Core/Institutional Investors.

 

Chief Ezendu affirmed in his statement that the company has plans to approach the Capital Market soon to raise additional equity.

 

He further affirmed that DEAP has secured the approval of the NSE for the issue; while awaiting that of the Securities & Exchange Commission (SEC).

 

“We have secured the approval of the Nigerian Stock Exchange for the issue and we are expecting the approval of the Securities & Exchange Commission in due course” Chief Ezendu said.

 

He confirmed that the capital raising is so important to DEAP; because it would be used to strengthen the company’s liquidity generally and competitiveness in all the industries in which the company is involved through the activities of its associates/subsidiary.

 

Meanwhile the shareholders of the company at the AGM initially opposed the idea of doing preferential allotment to a Core/Institutional Investors and accused the Directors of not coming out with the plan as scheduled; when they were prepared to increase their holdings; instead of seek Core/Institutional Investors.

 

Proshare NI gathered that DEAP was to approach the Market in March 2008 to raise fresh funds, but was delayed till November 2008 due to regulatory processes. In November also, the company shelved the plans due to the prevailing Market situation which forced some organisations including Union Bank of Nigeria Plc (UBN) to hold on coming to the Market.

 

As at the time of filling in this report, Proshare NI could not confirm the amount to be raised by DEAP, at what price and the exact time the company is expected to get SEC’s approval for the issue.

 

Proshare NI could not also confirm NSE’s approval for the proposed issue by the company.

 

However, DEAP increased its dividend payout to investors of the company from 13 Kobo in year 2007 to 15 Kobo in year 2008 indicating an increase of 15.38 percent (15.38%) in the review period.

 

This, the Chairman of the company affirmed that it is the intention of the Board to continue to improve the rate of dividend payable to shareholders in subsequent years; as well as improve the Return on Equity (ROE) and Total Assets of DEAP.



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