Transnational Corporation Plc has proposed a reduction in its number of shares in issue through a share capital reconstruction.
According to a corporate announcement filed with the Nigerian Exchange Limited on Friday, the move has received initial regulatory approval from the Financial Reporting Council of Nigeria and the Securities and Exchange Commission.
The notice stated, “The proposed reconstruction is being undertaken in line with the company’s corporate strategy and growth plan and is aimed at maximising shareholder value in the near term. This reconstruction initiative is expected to create a more manageable capital structure and improve share pricing and outlook in terms of per-share metrics.”
As part of the reconstruction, the total number of issued ordinary shares of Transcorp would be reduced by consolidating the issued shares at a ratio of 1 for 4.
Transcorp will cancel three out of every four ordinary shares held by its shareholders, resulting in the cancellation of 30,485,992,719 ordinary issued shares of N0.50 each and would lead to the reduction of the issued share capital to N5.08bn ordinary shares of N0.50.
Currently, the company’s share capital is N20.32bn comprising 40,647,990,293 ordinary shares of N0.50.
The company’s board of directors had appointed and authorised United Capital Plc and Vetiva Advisory Services Limited as financial advisers on the deal.
Transcorp added that the reconstruction would be in the best interest of the shareholders and was expected to bring the capital structure to a position that would enable the company to accommodate the various funding sources available soon.
“Effect a proportionate increase in the company’s share price so that the capitalisation and percentage holding of each shareholding will remain unaltered; and improve the outlook of the company’s earnings per share and dividend per share given that the EPS/DPS will then be derived from a lower outstanding share base,” it noted.
Meanwhile, Transcorp grew its profit before tax by 93.5 per cent to N58.8bn in 2023 from N30.4bn in the previous year.
It also improved revenue by 47.3 per cent to N197bn from N134bn in 2022.
Operating expenses increased by 22.6 per cent year-on-year to N26.9bn due to the country’s high inflation in 2023.
Also, net finance cost went up by 46 per cent to N22.6bn, due to interest on foreign currency loans, which the group said had been repaid.
