Economy
UAC Shareholders to Meet for Transfer of UPDC REIT Stocks
By Dipo Olowookere
On Monday, September 20, 2021, shareholders of UAC Nigeria Plc will gather for a court-ordered meeting (COM) to decide on what to do with the shares of the company in UPDC Real Estate Investment Trust (REIT).
Business Post reports that on Friday, July 23, 2021, the company obtained an order from a federal high court to convey a meeting of shareholders concerning the subject matter.
As part of a strategic review in 2018, the board and management of UAC Plc agreed that in the best interest of the company and to deliver more value to shareholders, it was necessary for the organisation to exit from its investments in the real estate sector in order to focus on the sectors that align with its core strategy.
UAC has the aim to generate attractive long-term, risk-adjusted returns for investors by growing its businesses into market leaders in their respective segments.
But because it was getting involved in different sectors, achieving this target was becoming difficult and it felt it was necessary to trim its operations to its core area of expertise.
The firm operates in animal feeds and edible oils, packaged food and beverages, paints, logistics, quick service restaurants (QSR) and real estate through UPDC Plc.
In 2020, UAC, as part of the unbundling strategy, reduced its ownership in UPDC from 93.86 per cent to 42.85 per cent following the sale of a 51 per cent stake to Custodian Investment Plc.
Last year, UPDC embarked on a process of unbundling its holdings in UPDC REIT to all its shareholders to maximise returns to its investors by providing direct access to the steady and regular dividend distributions of UPDC REIT as well as improving trading liquidity in UPDC REIT units.
As a result, UPDC transferred 649,392,661 units of UPDC REIT stocks to UAC, which still remains as one of its shareholders.
The board of UAC wants to transfer the 649,392,661 units of UPDC REIT shares it received from UPDC to its shareholders, necessitating the COM to be held in a month’s time.
At the meeting to be held virtually at 10:00 am, shareholders would be expected to approve “the transfer of the units held by the company in UPDC REIT to the eligible shareholders of the company (as defined in the scheme document) based on the application of the allocation ratio as specified in the scheme document.”
Business Post gathered the transfer of UPDC REIT units to UAC shareholders will be implemented through a scheme of arrangement under Section 715 of the Companies and Allied Matters Act (CAMA), 2020 as amended, incorporating a reduction in share capital under Section 131 of CAMA (the Scheme). The effect of this is that the units of UAC in UPDC REIT will be transferred to shareholders, pro-rata to their shareholding in UAC.
If the scheme is approved and when it is implemented, UAC’s shareholders will hold UPDC REIT units in addition to their existing shares in UAC and UAC will cease to be a unitholder in UPDC REIT.
This means UAC will no longer be a direct shareholder in UPDC REIT but eligible shareholders of UAC will become the direct shareholder of UPDC REIT.
As a result, the share capital account of UAC will reduce by N3,896,355,966, being the value of the transferred units through the reduction of its share premium account and the share premium deduction amount shall be transferred into the UPDC REIT unbundling liability account.
UAC has said a day after the COM, it should file the resolutions with the Corporate Affairs Commission (CAC) and on October 20, the formal approval of the Securities and Exchange Commission (SEC) is expected to be obtained and on November 4, a sanction of the scheme should be obtained from the court, while a day after, the Certified True Copy (CTC) should be sent to SEC.
It stated that after the last trading day to qualify for the scheme (eligibility date) on November 8, it would register the CTC of the court sanction at the CAC on November 11 and the next day, this would be published in two national newspapers and on November 18, the accounts of the eligible shareholders would be credited with the corresponding number of shares and on November 22, the summary report would be filed with SEC.
By Dipo Olowookere
A 1.08 per cent growth was further printed by the Nigerian Exchange (NGX) Limited on Friday on improved appetite for Nigerian stocks.
Data showed that the insurance sector lost 0.61 per cent yesterday due to profit-taking as the energy space gave up 0.08 per cent, while the commodity counter closed flat.
However, the industrial goods landscape appreciated by 2.06 per cent, the banking index improved by 1.31 per cent, and the consumer goods sector expanded by 0.83 per cent.
At the close of business on Customs Street, the All-Share Index (ASI) increased by 1,563.92 points to 147,040.07 points from 145,476.15 points and the market capitalisation went up by N996 billion to N93.722 trillion from N92.726 trillion.
UAC Nigeria led the advancers’ log yesterday after it grew by 10.00 per cent to N96.80, Transcorp Hotels jumped by 9.71 per cent to N172.80, Royal Exchange appreciated by 8.89 per cent to N1.96, Ikeja Hotel soared by 8.74 per cent to N31.10, and Veritas Kapital leapt by 8.07 per cent to N1.74.
On the flip side, Union Dicon declined by 10.00 per cent to N6.30, ABC Transport slipped by 9.88 per cent to N3.10, AXA Mansard depreciated by 7.19 per cent to N12.90, FTN Cocoa lost 4.62 per cent to trade at N4.75, and Guinea Insurance dropped 3.36 per cent to finish at N1.15.
A total of 38 stocks ended on the gainers’ table and 17 stocks finished on the losers’ table, representing a positive market breadth index and strong investor sentiment.
Traders transacted 361.6 million equities for N14.8 billion in 21,051 deals yesterday versus the 1.9 billion equities worth N19.2 billion traded in 23,369 deals a day earlier, showing a decline in the trading volume, value, and number of deals by 80.97 per cent, 22.92 per cent, and 14.20 per cent, respectively.
The busiest stock for the session was Zenith Bank with 59.5 million units worth N3.6 billion, Access Holdings traded 46.1 million units valued at N973.0 million, Fidelity Bank exchanged 29.4 million units for N560.4 million, FCMB transacted 27.9 million units worth N293.9 million, and Tantalizers sold 13.0 million units valued at N29.8 million.
By Adedapo Adesanya
Energy stocks influenced the 4.76 per cent loss recorded by the NASD Over-the-Counter (OTC) Securities Exchange on Friday, December 5.
The culprits were the duo of 11 Plc and Nipco Plc,with the former shedding N32.17 to end at N291.83 per share compared with the previous day’s N324.00 per share, and the latter down by N21.00 to sell at N195.00 per unit versus the previous session’s N216.00 per unit.
Consequently, the NASD Unlisted Security Index (NSI) slumped by 170.16 points to 3,401.37 points from 3,571.53 points and the market capitalisation lost N101.81 billion to close at N2.035 billion from the N2.136 trillion quoted in the preceding session.
The OTC securities exchange suffered the decline yesterday despite the share prices of three companies closing green.
Central Securities Clearing System (CSCS) Plc was up by N1.80 to close at N39.80 per share compared with Thursday’s price of N38.00 per share, Air Liquide Plc appreciated by N1.09 to N11.99 per unit from N10.90 per unit, and FrieslandCampina Wamco Nigeria Plc grew by 78 Kobo to N56.57 per share from N55.79 per share.
During the session, the volume of transactions rose by 6,885.3 per cent to 18.2 million units from 4.3 million units, the value of transactions ballooned by 10,301.7 per cent to N389.7 million from N347.2 million, but the number of deals declined by 29.7 per cent to 26 deals from 37 deals.
Infrastructure Credit Guarantee Company (InfraCredit) Plc ended the day as the most traded stock by value on a year-to-date basis with 5.8 billion units worth N16.4 billion, followed by Okitipupa Plc with 170.4 million units valued at N8.0 billion, and Air Liquide Plc with 507.5 million units worth N4.2 billion.
InfraCredit Plc also finished the day as the most traded stock by volume on a year-to-date basis with 5.8 billion units transacted for N16.4 billion, followed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.2 million, and Impresit Bakolori Plc with 536.9 million units worth N524.9 million.
By Adedapo Adesanya
The Naira depreciated further against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, December 5, as FX demand pressure mounts.
The Nigerian currency lost N2.60 or 0.18 per cent against the greenback to close at N1,450.43/$1 compared with the previous day’s N1,447.83/$1.
Equally, the domestic currency declined against the Pound Sterling in the official forex market during the session by N4.48 to trade at N1,935.45/£1, in contrast to Thursday’s closing price of N1,930.97/£1 and shrank against the Euro by 43 Kobo to end at N1,689.17/€1 versus the preceding session’s rate of N1,688.74/€1.
Similarly, the local currency performed badly against the US Dollar at the GTBank FX counter by N2 to close at N1,455/$1 versus Thursday’s N1,453/$1 but traded flat at the parallel market at N14.65/$1.
As the country gets into the festive period, pressure mounted on the local currency reflecting higher foreign payments and lower FX inflows.
However, there are expectations that the Nigerian currency will be stable, supported by interventions by to the Central Bank of Nigeria (CBN) in the face of steady dollar Demand and inflows from Detty December festivities that will give the Naira a boost after it depreciated mildly last month.
Traders cited by Reuters expect that the Naira will trade within a band of N1,443-N1,450/$1 next week, buoyed by improved FX interventions by the apex bank.
As for the crypto market, it was down yesterday due to profit-taking associated with year-end trading. However, the December 1-Year Consumer Inflation Expectation by the University of Michigan fell to 4.1 per cent from 4.5 per cent previously and 4.5 per cent expected. The 5-Year Consumer Inflation Expectation fell to 3.2 per cent from 3.4 per cent previously and 3.4 per cent expected.
With the dearth of official economic data of late, these private surveys have taken on a new level of significance and the market banks of them to make decisions.
Cardano (ADA) depreciated by 5.7 per cent to $0.4142, Dogecoin (DOGE) slid by 5.1 per cent to $0.1394, Ethereum (ETH) dropped by 3.9 per cent to $3,039.75, Solana (SOL) declined by 3.8 per cent to $133.24, and Litecoin (LTC) fell by 3.7 per cent to $80.59.
Further, Bitcoin (BTC) went down by 2.6 per cent to sell at $89,683.72, Binance Coin (BNB) slumped by 2.2 per cent to $883.59, and Ripple (XRP) shrank by 2.1 per cent to $2.04, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
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