Ellah Lakes Plc has been given approval by the Nigerian Securities and Exchange Commission (SEC) for its plans to raise an additional N2.90 billion through a rights issue. The company made this announcement via an official statement sent to the Nigeria Exchange Limited (NGX).
According to the statement, Ellah Lakes will offer 1,000,000,000 Ordinary Shares at a price of N2.90 per share, each with a nominal value of 50 Kobo. This would result in a total capital infusion of N2.90 billion. However, it’s important to note that the success of this rights issue is contingent upon regulatory approval.
In official statement, Ellah Lakes Plc is delighted to inform its valued Shareholders, Stakeholders, Nigerian Exchange Limited (The Exchange), and the general public that they have received approval from the Securities Exchange Commission (SEC) to proceed with the planned Rights Issue. This involves the issuance of 1,000,000,000 Ordinary Shares at N2.90 per share, based on a ratio of one (1) new ordinary share for every two (2) ordinary shares held.
The Qualification Date for the Rights Issue is set for February 10th, 2023. Pending SEC’s approval of the offer documents, the application list is expected to open on October 9th, 2023, or on a date approved by the Commission, and will remain open for a maximum of 28 days.
Shareholders will receive the rights circular, and application forms will be accessible through the company’s Registrars’ website for easy access. Subsequently, shareholders are advised to reach out to their stockbrokers and financial advisors for more details about this offering.
A rights issue essentially invites existing shareholders to purchase additional new shares in the company at a discounted price compared to the market rate, on a specified future date. It’s worth noting that shareholders have the option to exercise this right or not. The capital raised through this endeavor could potentially be used by the company for various purposes such as asset acquisition, takeovers, debt repayment, or bolstering its financial position.
This move is expected to fortify the company’s balance sheet and provide the management with additional resources to execute revenue and profit-enhancing projects and strategies.