By Modupe Gbadeyanka
Group Chief Executive Officer of UAC of Nigeria, Mr Abdul Bello, has revealed plans by the conglomerate to raise the sum of N20 billion from the issuance of bonds to refinance short-term borrowings at its real estate subsidiary, UPDC.
The real estate firm of the group has recorded losses in the past years, but UAC of Nigeria wants to raise the funds to support the company.
On Wednesday, UPDC disclosed that its losses widened to N3.05 billion in 2017 from N1.23 billion the previous year.
UPDC cut its debt to N19.3 billion in 2017, down 15 percent from the previous year and shares in UAC, which has interests in foods, logistics and livestock feeds, rose 0.58 percent on Thursday to N17.30k while UPDC traded flat at N3.
Speaking on Thursday during an analysts’ call, the group CEO of UAC of Nigeria, Mr Abdul Bello disclosed that the harsh economic conditions in the country were still affecting the housing market and that sales at UPDC fell 20 percent in 2017.
Commenting on the anticipated bond sale, Mr Bello said, “We would use 2018 to refinance a short-term facility. We intend to have this business restructured.”
“We see long-term growth supported by a huge housing deficit,” he expressed optimism.
In 2016, Nigeria fell into recession, but got out of it in the second quarter of last year.
However, the country is still suffering from the after-effect of the recession.
At the moment, Nigeria, home to more than 180 million people, suffers from long-term a housing shortage.
Few banks offer long-term mortgages as high interest rates make them unattractive for buyers while lenders worry about the default risk.
Adedapo Adesanya