By Goddy Egene
Custodian Investment Plc is to make a mandatory takeover offer (MTO) to minority shares of UACN Property Development Company Plc (UPDC) following the approval given by the Securities and Exchange Commission (SEC) dated May 18, 2021.
In notification to the Nigerian Exchange Limited (NGX) yesterday, Custodian Investment Plc said following the approval, it had been authorised to proceed with the MTO to be made to minority shareholders of UPDC for the purchase of up to 34,415,332 ordinary shares of 50 kobo shares at 90 kobo per share.
Custodian Investment had last year completed acquisition of the 51 per cent majority equity stake in UPDC) Plc from UAC of Nigeria Plc.
Group Managing Director, Custodian Investment, Wole Oshin had said the acquisition was motivated by the fact that Custodian and UACN shared the view that their ambitions for capturing opportunity in the real estate industry will be better achieved working in partnership.
“UPDC is one of Nigeria’s leading real estate development companies, having completed several landmark residential and commercial developments over the past twenty years. This transaction will provide Custodian with a platform to capture arising real estate opportunities. It also immediately provides recurring cash flow visibility and attractive yields as a result of its direct exposure to Nigeria’s leading real estate investment trust (UPDC REIT) with a track record of profitability and annual dividend distribution which offers a good compliment for our product portfolio,” Oshin said.
The shareholders of UPDC recently authorised the board of directors to enter into loan agreement with Custodian Investment Plc and UACN to discharge its outstanding debt obligations.
They authorised the company, “to enter into a shareholder loan agreement with Custodian Investment PLC and UAC of Nigeria Plc for the provision of a shareholder loan required by the company for the discharge of its outstanding debt obligations; that in furtherance of the foregoing resolution, the company be and is hereby authorised to create a charge over such asset(s) of the company as the directors may determine, in favour of the majority shareholders as security for the shareholder loan.”
The company was equally authorised to create a charge over such its asset(s) as the directors may determine, in favour of the majority shareholders as security for the shareholder loan.
The shareholders also authorised the directors to raise additional capital via the issue of debt instruments, preference shares or ordinary shares or a combination of any of these options whether by way of private placements, rights to existing shareholders or offer for subscription at a quantum and price upon such other terms and conditions to be determined at the discretion of the directors and subject to any requisite regulatory approvals.
