Modupe Gbadeyanka
By Modupe Gbadeyanka
The Group Managing Director of UAC Nigeria (UACN) Plc, Mr Fola Aiyesimoju, has expressed the willingness of the conglomerate to complete its unbundling process from UACN Property Development Company (UPDC) by July 2020.
However, Mr Aiyesimoju emphasised that the exercise may go beyond this date as the COCID-19 pandemic could disrupt approval timings.
In a statement at the weekend, he said UAC Nigeria was very optimistic to finally offload its majority stake from its loss-making property subsidiary in the next two months.
According to him, the process would be completed to unbundle the stake to shareholders, subject to regulatory approvals.
UPDC has not paid a dividend to the parent company for some time and according to Mr Aiyesimoju, the real estate company was conserving cash especially during the coronavirus pandemic.
He said the firm invested in the luxury real estate market at a time the economy was growing, noting that high interest rates have hurt margins coupled with challenges following a recession four years ago before the ongoing pandemic.
Following a rights issue, UAC Nigeria increased its stake in the real estate unit from 64.2 percent to 93.9 percent.
The conglomerate, which has interests in food and restaurants, agricultural feed, paints and logistics, converted its bridge loan to equity in the rights issue to conserve cash.
However, in 2019, UPDC widened losses despite getting fresh cash injection of N250 million ($694,000) from a share sale in April.
Business Post reports that as at the time of filing this report on Monday, shares of UAC Nigeria and UPDC were flat at N6.80 and 92 kobo respectively.
In 2019, the Nigerian Stock Exchange (NSE) approved the request to list the N15.962 billion rights issue of UPDC on its trading platform.
This followed the filing of the application in September 2019 by the firm through its stockbroker, Stanbic IBTC Stockbrokers Limited aftergetting the final approval from the Securities and Exchange Commission (SEC).
The exercise, which has Stanbic IBTC Capital Limited as the issuing house, was for the issuance 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 seven ordinary shares held as at September 30, 2019.
