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Costain plans N8b hybrid offering


November 05, 2007/Guardian



To enhance its productive capability and diversification plans, Costain (West African) Plc has concluded plans to raise about N8 billion from the capital market.


The purpose of the offer, according to the company\'s Managing Director, Mr. Phil Wharton, is to expand the company\'s operations in furniture and joinery works, plant and equipment as well as acquisition of other companies to broaden the risk of the company, coupled with the enhancement of working capital. The company\'s markets, according to him, are in the area of infrastructure, private sector, oil and gas, telecomms and power.


Its commercial strategy, he explained, is to diversify its revenue base, reduce costs and take cost advantage, manage risks, and expand to sub Saharan African countries like Mali and Chad, while also increasing or expanding the company\'s knowledge base.


He explained that the offer, which is still awaiting the final endorsement of the Securities And Exchange Commission (SEC), would increase the company\'s issued shares to about 1.1 billion units and would be issued at a discount from the current market price of N18.89, while noting that the company\'s share price had risen from an a low N1.48 this year to N18.89, a growth of 1,280 per cent, indicating that it recorded the maximum level of growth amongst all the companies in the equities sector.


He explained that the company has not only returned to profitability but it has also concluded arrangements to pay dividend to shareholders in the next two years.




His words: \"The turnaround was accessioned by new management, new techniques, coupled with new enthusiasm by the management about the company. In the next two years, we will have cause to pay dividend.\"


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