By Dipo Olowookere
The N1.4 billion rights issue of Red Star Express Plc recorded a 100 percent subscription rate, a disclosure from the Nigerian Stock Exchange (NSE) on Friday revealed.
The leading courier and package delivery company in Nigeria had in 2019 commenced a process of raising fresh funds from its shareholders through a rights issue.
During the exercise, the firm issued 336,855,291 ordinary shares of 50 kobo each at N4 per share on the basis of four new ordinary shares for every seven ordinary shares held as at August 21, 2019.
Yesterday, the additional shares sold through the rights issue were admitted on the trading platform of the exchange as required by the rules guiding the stock market to make the new stocks tradable.
“Dealing members are hereby notified that additional 336,855,291 ordinary shares of Red Star Express Plc were today, Friday, March 6, 2020, listed on the daily official list of the Nigerian Stock Exchange,” the notice signed by Ms Elizabeth Ekpo on behalf of the Head, Listings Regulation Department at the NSE, Mr Godstime Iwenekhai, stated.
The circular further said, “With this listing of the additional 336,855,291 ordinary shares, the total issued and fully paid up shares of Red Star Express Plc has now increased from 589,496,760 to 926,352,051 ordinary shares of 50 kobo each.”
In November 2019, during a chat with Business Post and other analysts and members of the investing community, the management of the top courier and logistic service provider had stated that proceeds from the exercise would be used to expand its operations.
According to Red Star Express, the four major things the funds raised from the rights issue would be spent on include provision of trucks; development of warehouse facilities at Lagos-Ibadan Expressway and the Murtala Muhammed International Airport in Lagos; deployment of more improved technology; working capital of the company.
“We are going to develop warehouse facilities at Lagos-Ibadan Expressway and Murtala Muhammed International Airport Cargo terminal. Spaces are already jampacked and we need to expand.
“Approval has been given by the Federal Airport Authority of Nigeria (FAAN) and this will cover 54 percent of the total money and this is about N704 million and is expected to be completed in 18 months,” the Group Managing Director of Red Star Express Plc, Mr Sola Obabori, had said.
He had further said, “We are also developing a 9000 square kilometre space for warehouse development along Lagos-Ibadan Expressway.”
“We will be buying additional trucks to drive the logistics part of our business,” the GMD stated, noting that capital to be raise for this purpose would be N201.6 million (15 percent of the rights issue) and should be purchased under three months.
Adedapo Adesanya