By Nse Anthony-Uko
(Sundiata Finance) — UAC of Nigeria Plc is shopping for N15.37 billion fresh capital from existing shareholders to boost its operations so as the record improved performance and deliver competitive returns to shareholders in the years ahead.
Specifically, UACN is making a Rights Issue of 960,432,193 ordinary shares of 50 kobo each at N16 per share to shareholders. The offer opened October 19 and is expected to close on December 22, 2017.
The Group Managing Director of UACN, Mr. Larry Ettah, who will be retiring effective December 31, 2017, has said the proceeds of the rights issue would provide the company with the requisite financial capability to address the capital needs of its agro-facing subsidiaries in 2018 among others.
UACN had reported a revenue growth of 21 per cent to N68.7 billion for the nine months ended September 30, from N56.8 billion.
However, profit after tax fell by 55 per cent from N4.8 billion to N2.2 billion, partly due to high interest charges and cost of inputs.
According to Ettah, the nine months result reflect the impact of elevated input costs and interest rates on the company’s operations.
“We have made progress in reducing finance costs through focused execution of UACN Property Development Company Plc’s Cash Generation Plan, the depletion of high-priced inventory and the equity raise of Portland Paints, Livestock Feeds and UPDC. We are have launched our N15.4 billion Rights Issue. This will provide us with the requisite financial capability to address the capital needs of our agro-facing subsidiaries in 2018,” he said.
He noted that the stability in the forex market, moderation in Treasury Bills rate and the general indication of a good grains crop harvest are positive for profit improvement and margin rehabilitation, going forward.
Although Ettah will retire at the end of this year , he has restated his expressed confidence in Mr. Abdul Bello, who has been appointed to take over as from January 1, 2018.
“I restate my expressed confidence in Abdul’s ability to provide the needed leadership in the years ahead for the company to build on its strong foundation, drive its strategic agenda and deliver competitive returns to our shareholders,” he said.
According to Ettah, Abdul is an ideal and logical successor given his background in UACN and track record of achievement at various levels in the organisation.
Born on the 8th of November 1960, Abdul joined Grand Cereals Limited (GCL), a subsidiary of UAC of Nigeria PLC, on 23rd October 1989 as Chief Accountant. Prior to joining UACN, he started as Management Trainee in Inlaks Plc in August 1985.