UPDC to Raise N5 Billion Via Rights Issue

UACN Property Development Company (UPDC) Plc   will   soon shop for N5 billion from the capital market through existing shareholders.  The funds would be raised via a rights issue of 1.719 billion ordinary shares of 50 kobo each at N3.00 per share on the basis of one new share for every one share already held.

The Nigerian Stock Exchange (NSE) disclosed at the weekend that UPDC has already applied for the approval and listing of the right issue through its stockbroker, Stanbic IBTC Stockbrokers Limited.

The Chairman of UPDC, Mr. Larry Ettah had last May disclosed plans by the company to raise fresh capital to boost its operations.

Speaking to shareholders during the company’s annual general meeting (AGM) in Lagos, Ettah said the capital injection would be in form of rights issue, disposal of low performing assets and sell down of surplus stake in the real estate investment trust (REIT) among others.

 “Our strategy for 2016 and beyond includes deleveraging the business through equity capital injection by way of rights issue, sell down of surplus stake in the REIT and disposal of low-performing assets, as well as leveraging on partnerships and alliances that are in sync with the company’s long term goals,” he had said.

As part of capital injection, UPDC raised N16.799 billion commercial paper (CP) under its N24 billion CP Issuance Programme.

Speaking on the debt capital, Managing Director of  UPDC, Mr. Hakeem Ogunniran, said the CP issuance had afforded the company a better opportunity to successfully diversify its short-term funding sources at a 25 per cent reduced cost, thereby enhancing their value-creating capability for the company’s  various stakeholders.

Ettah had   disclosed that the company was recalibrating development towards the retail segment and has put in place strategies to enable it take advantage of emerging opportunities in the segment.

 According to him, despite the slow-down in the luxury segment, the Nigerian real estate market remained attractive as there were significant untapped potential in the residential category, and numerous opportunities in the retail, commercial and industrial segments of the market in the near term.

 He explained that growth in the commercial segment has been driven by new investments in high growth sectors like retail, hospitality/tourism and telecommunications, while the spike in demand for residential housing is linked to population growth & rising income levels (emergence of middle class).

He disclosed that although real estate development activity was increasing in several states of the federation, demand and  supply for commercial and residential properties remain more predominant in Lagos, Abuja and Port Harcourt.