Economy
UACN Property to Slash N20.8bn Debt to N4.8bn
By Adedapo Adesanya
The management of UACN Property Development (UPDC) Plc has announced plans by the company to reduce its current debt obligation of about N20.8 billion to about N4.8 billion.
Addressing some analysts and members of the media, including Business Post at the Exchange on Tuesday in Lagos, the CEO of UPDC, Mr Folasope Aiyesimoju, stated that this was one of the main reasons for the firm’s N16 billion rights issue, which is to be used to refinance its short-term debt and reduce finance costs.
He said the optimal performance of its recapitalisation through this right issue will see the debt cut to N4.8 billion by repaying the bridge loan facility owed its former parent company, UAC of Nigeria Plc.
At the company’s Facts Behind the Issue presentation yesterday, Mr Aiyesimoju disclosed the company’s broader strategy to create long term shareholder value through the recapitalisation effort.
UPDC, in the second quarter of 2019, had obtained a one-year N16 billion bridge loan for debt obligations and to reduce high debt service cost. The facility was used to pay the company’s maturing short term obligations of N6.5 billion in Commercial Papers, N7.4 billion Commercial Paper-related support facility, and N2.1 billion in intra-group working capital facilities.
In 2019, UAC of Nigeria Plc offloaded its entire stock in its real estate subsidiary, UPDC, following years of loss–making despite efforts to turn it around. Results of the company for the half year ended June 2019 showed that the former parent company recorded a N1.2 billion loss while in 2018, it recorded a N15 billion loss due to UPDC.
The company now plans to raise fresh funds via a rights issue of 15,961,574,145 ordinary shares of 50 kobo each at N1.00 per share on the basis of 43 new ordinary shares for every 7 ordinary shares held as at the close of business on Monday, September 30, 2019 through its issuing house, Stanbic IBTC Capital.
Set to reposition the real estate company, Mr Aiyesimoju, who was appointed in August 2019 after the board was reconstituted, is seeking to strengthen and improve its capital structure by focusing on affordable housing to cater for young middle management professionals.
The company also said that it will be looking at expanding its hotel service in Lagos to offer a more with the current housing demands of its target clientele.
He explained that with the teeming youth population in Nigeria, the company deemed it necessary to address the gap in residential units for young professionals one unit at a time.
“Recognising a shift in the demographics in Nigeria with a rising youth population, and limited home ownership opportunities for young middle management professionals in close proximity to the central business areas of Lagos, we tested the market with our first residences development in Festac, Lagos.
“The residences offered 196 units of 1- and 2-bedroom apartment at a price of N22 million to N30 million per unit,” he said.
According to the UPDC CEO, this is the fastest selling development of the company, adding that in years to come, it will replicate this in other parts of Lagos.
“Our aim is to expand this concept for middle income housing for young professionals further into areas such as Surulere, Yaba, and Ibeju-Lekki over the next three years,” he added.
“Located opposite our mixed-use Festival Complex in Festac, this development is scheduled to commence in the third quarter of 2020. The project will be funded with a mix of developer equity and off-plan sales,” he added.
To improve its hotel performance, Mr Aiyesimoju said, “Our plan is to convert one of the three hotel wings into serviced residential apartments for sale, similar to our successful residences development.”
By Adedapo Adesanya
Okitipupa Plc was the sole price gainer at the NASD Over-the-Counter (OTC) Securities Exchange on Friday, August 7, lifting the trading platform by 0.44 per cent at the close of transactions.
The share price of the palm oil producer appreciated during the trading session by N25.00 or 9.0 per cent to N277.00 per unit compared with the previous day’s N252.00 per unit.
As a result, the market capitalisation gained N12.29 billion to close at N2,807 trillion, in contrast to the previous session’s N2.795 trillion, while the NASD Security Index (NSI) added 93.63 points to finish at 4,678.08 points compared with Thursday’s 4,657.59 points.
The bourse recorded a price loser yesterday, and this was Mass Telecoms Innovation Plc, which crashed by 3 Kobo or 9.4 per cent to settle at 32 Kobo per share versus the previous day’s 35 Kobo per share.
The volume of securities traded by investors plunged by 81.5 per cent to 535,7560 units from 2.9 million units, the value of securities slumped by 93.9 per cent to N6.0 million from N99.2 million, and the number of deals decreased by 41.9 per cent to 36 deals from 62 deals.
Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units transacted for N6.5 billion, and Central Securities Clearing System (CSCS) Plc with 77.0 million units exchanged for N5.5 billion.
GNI Plc also ended the day as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, trailed by Infracredit Plc with 2.3 billion units valued at N6.5 billion, and Resourcery Plc with 1.1 billion units sold for N415.7 million.
By Dipo Olowookere
A 0.15 per cent growth was achieved by the Nigerian Exchange (NGX) Limited, driven by continued buying interest in banking stocks such as First Holdco and others.
The banking index was up by 1.53 per cent during the session, offsetting the losses recorded by the others. The industrial goods segment fell by 0.37 per cent, the insurance counter shrank by 0.21 per cent, and the energy sector contracted by 0.04 per cent, while the consumer goods space closed flat.
At the close of business, the All-Share Index (ASI) moved up by 364.26 points to 245,573.60 points from 245,209.34 points, and the market capitalisation increased by N235 billion to N158.513 trillion from N158.278 trillion.
Despite the gains printed by Customs Street during the trading day, investor sentiment was weak, as there were 22 price gainers and 24 price losers, indicating a negative market breadth index.
UPDC surged by 9.23 per cent to N3.55, CWG soared by 6.56 per cent to N19.50, AXA Mansard appreciated by 4.80 per cent to N13.10, Neimeth advanced by 4.24 per cent to N8.60, and Cutix improved by 4.00 per cent to N2.60.
Conversely, Red Star Express lost 10.00 per cent to trade at N18.00, CAP declined by 9.98 per cent to N115.45, John Holt shrank by 9.82 per cent to N10.10, ABC Transport depreciated by 9.57 per cent to N5.20, and Legend Internet crashed by 8.70 per cent to N4.20.
A total of 1.5 billion equities worth N26.7 billion exchanged hands in 42,580 deals on Friday versus the 531.8 million equities valued at N20.5 billion traded in 44,826 deals on Thursday, representing a spike in the trading volume, value, and number of deals by 182.06 per cent, 30.24 per cent, and 5.01 per cent, respectively.
The busiest stock during the session was Fortis Global Insurance, with a turnover of 824.5 million units valued at N2.1 billion, FCMB traded 217.9 million units worth N2.8 billion, Access Holdings exchanged 176.2 million units for N4.7 billion, Chams sold 32.5 million units worth N132.1 million, and First Holdco transacted 25.0 million units valued at N3.7 billion.
By Adedapo Adesanya
The Naira further closed south against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, August 7, by 81 Kobo or 0.06 per cent to N1,365.69/$1 from N1,364.88/$1.
It was a similar situation for the Nigerian Naira in the official market during the session as against the Pound Sterling; it lost N1.08 to quote at N1,839.17 versus the previous day’s N1,838.09/£1, and against the Euro, it slipped by N1.23 to close at N1,575.73/€1, in contrast to the preceding session’s N1,574.80/€1.
Further, at the GTBank forex counter, the Nigerian currency weakened against the Dollar yesterday by N2 to settle at N1,371/$1 compared with Thursday’s N1,369/$1, and at the black market, it traded flat at N1,400/$1.
The country’s legal tender came under FX demand pressure on Friday, with turnover rising by 304.3 per cent to $399.5 million from $98.8 million the previous day, with the number of deals slightly up to 107 from 106.
Next week, traders expect the Naira to hold steady, buoyed by dollar sales by the Central Bank of Nigeria (CBN), whose presence in the market could help ease demand pressure.
As for the cryptocurrency market, Bitcoin (BTC) neared the $65,000-mark after it gained 0.8 per cent to trade at $64,968.05, as investors took advantage of recent drops to shore up their holdings.
Previously, the decision by the US Senate to delay a vote on the Crypto Clarity Act until at least September weakened the outlook. The bill, which would set out which US regulator oversees which digital assets, needs 60 votes to pass and it is unclear whether it currently has 50.
Solana (SOL) grew by 2.5 per cent to $74.81, Dogecoin (DOGE) rose by 1.3 per cent to $0.0702, Binance Coin (BNB) jumped by 1.1 per cent to $593.80, Ethereum (ETH) expanded by 0.5 per cent to $1,916.08, Ripple (XRP) also soared by 0.5 per cent to $1.03, and TRON (TRX) appreciated by 0.2 per cent to $0.3275.
However, Cardano (ADA) depreciated by 1.0 per cent to $0.1997, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.
