Rights Issue Shares Lift UACNÂ Â Market Capitalisation to N49bn
The market capitalisation of UAC of Nigeria Plc rose to N49.1 billion last Friday, following the listing of additional sharesÂ of 960,432,193.Â Â By this action, the total outstanding shares of the company now stood at 2,881,296,580.
The company had made the Rights Issue last year to raise N15.37 billion as part of efforts to boost its operations. The company had said the proceeds ofÂ the rights issue would provide it withÂ theÂ requisiteÂ Â financialÂ Â capabilityÂ Â to address the capital needs of itsÂ Â 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, 2017, from N56.8 billion in the corresponding period of 2016.
However, profit after tax fell by 55 per cent from N4.8 billion to N2.2 billion, partlyÂ due to high interest charges and cost of inputs.Â â€œWe have made progress in reducing finance costs through focused execution ofÂ UACN Property Development Company Plcâ€™sÂ Cash Generation Plan, the depletion of high-pricedÂ inventoryÂ andÂ Â the equity raise of Portland Paints, Livestock Feeds and UPDC. WeÂ haveÂ launchedÂ ourÂ N15.4Â billionÂ RightsÂ Issue.
This willÂ provideÂ usÂ withÂ theÂ requisiteÂ Â financialÂ Â capabilityÂ Â to address the capital needs of our agro-facing subsidiaries in 2018,â€ the company said.
Also, as part of strategies to remain efficient, the company recently decided to close down one of its subsidiary, Warm Spring Waters Limited(WSWL) due to poor performance.Â Â The conglomerate owns 76 per cent equity in the company that is based in Ikogosi-Ekiti State.
Â UACN had explained thatÂ the company was promoted in 2002Â with Ekiti State Government, Ikogosi-Ekiti Community and some private investors to produce premium quality spring water under Gossy label.
According to UACNÂ sinceÂ Â WSWL commencedÂ Â commercial production in 2013, it has been delivering weak operational performance due to problems associated with the rural location of the plant at the source of the spring.
â€œThere were alsoÂ Â Â associated logistics challenges, 100 per cent reliance on company generated power and difficult operating environment. The shareholders of the company, at a meeting held on February 6, 2018, resolved to appoint a liquidator to wind up the affairs of the company distribute its assets,â€ it said.
UACN assured stakeholders that the liquation of the WSWL will not have any negative impact since its contribution to the groupâ€™sÂ results is less than one per cent.