The Chief Executive Officer of UAC group, Larry Ettah has disclosed that the company would suspend the planned rights issue due to the downward trend of the Stock Exchange and also the rejection of issuance of preference shares through private placement by its shareholders.
Chief Executive officer on Tuesday said that the company would rather consider raising the capital at the subsidiary levels and while the group funds its own subscription from internal cash flow.
Ettah disclosed that its property subsidiary, UPDC, would do a 5.6 billion naira ($28.16 million) rights issue and another 24 billion naira via commercial paper to lower its funding costs.
Two other subsidiaries: Livestock Feeds would sell 1.1 billion naira in shares and Portland Paints would also sell 2 billion naira in shares.
UAC group with interests in food and restaurants, agricultural feed, paints, logistics and real estate, posted a 43.6 percent fall in pretax profit for 2015 at 7.94 billion naira.
Shares in the UAC group ended flat at 19.43 naira while its agricultural unit Livestock Feeds dropped 4.76 percent to 1.0 naira. Both underperformed the broader share index, which was up 0.42 percent on Tuesday.
Ettah said 2015 was a tough operating year for UAC due dollar shortages in the forex market following a currency devaluation, coupled with slower economic growth due to the lower price of crude, Nigeria’s main export commodity.
UAC plans to diversify its group into retail and consumer segments, which Ettah expects to account for 60 percent of its business, up from 15 percent now.
“The economy was growing at 7 percent and now its growing at a lower rates and that affects how our business does. We have tried to maintain volume growth rather than price increases because we recognise the weak condition of the market,” he said.
UAC group with interests in food and restaurants, agricultural feed, paints, logistics and real estate, posted a 43.6 percent fall in pretax profit for 2015 at 7.94 billion naira.
Shares in the UAC group ended flat at 19.43 naira while its agricultural unit Livestock Feeds dropped 4.76 percent to 1.0 naira.
Ettah said 2015 was a tough operating year for UAC due dollar shortages in the forex market following a currency devaluation, coupled with slower economic growth due to the lower price of crude, Nigeria’s main export commodity.
UAC plans to diversify its group into retail and consumer segments, which Ettah expects to account for 60 percent of its business, up from 15 percent now.
“The economy was growing at 7 percent and now its growing at a lower rates and that affects how our business does. We have tried to maintain volume growth rather than price increases because we recognise the weak condition of the market,” he said.
