Red Star Express to Raise N1.33bn to Generate Higher Revenue
By Dipo Olowookere
Leading logistics solution provider with offices in over 160 locations in Nigeria, Red Star Express Plc, has expressed its intention to raise the sum of N1.33 billion from its shareholders.
This capital raising, according to the company, would be done through rights issue at a date to be fixed by the board, subject to approval of the Nigerian Stock Exchange (NSE).
As part of the moves to kick-start the process, stockbroker of Red Star Express, APT Securities and Funds Limited, has submitted an application to the NSE to approval and eventual listing of the new shares of the firm raised from the exercise.
In a circular issued on Wednesday and signed by Ms Lilian Dako for the Head of Listings Regulation Department at the NSE, the proposed rights issue would only benefit shareholders of the company as at yesterday.
It was disclosed that the board would be offering to its shareholders, through the rights issue, a total of 294.8 million ordinary shares at the rate of N4.50k per unit.
Business Post reports that as at the qualification date, which was yesterday, shares of Red Star Express were traded at the stock market at N4.24k and at the close of business today, the price remained flat at N4.24k per unit.
“Dealing members are hereby notified that Red Star Express Plc has through its stockbroker, APT Securities and Funds Limited, has submitted an application to the Nigerian Stock Exchange for the approval and listing of a rights issue of 294,748,380 ordinary shares of 50 kobo each at N4.50k per share, on the basis of one new share for every two ordinary shares held.
“The qualification date for the rights issue is today, Wednesday, August 21, 2019,” the circular from the regulatory agency said.
Business Post recalls that the 2019 Annual General Meeting (AGM) of the firm held recently in Lagos, the Chairman, Mr Suleiman Barau, informed shareholders that the rights issue would be used to expand the company’s current operations, implement new growth opportunities already identified, and optimise its use of technology.
CEO of Red Star Express, Mr Peter Obabori, said the company was “expanding and diversifying the reach of our operations to other West African countries as we are also in Ghana which makes us confident that by the end of the financial year the company would generate higher revenue.”