UAC concludes plans to recapitalise, restructure UPDC
The Board of Directors of UAC of Nigeria Plc (UAC) and UACN Property Development Company (UPDC) has informed the Nigerian Stock Exchange (NSE), their shareholders and stakeholders that they are considering strategic initiatives involving a recapitalisation and restructuring of UPDC.
These initiatives are still subject to the review and approval of the Securities and Exchange Commission (SEC), the Nigerian Stock Exchange, and shareholders of both companies.
UPDC commenced operations as department and subsequently a division within UAC focused on managing UAC’s real estate holdings.
In 1997, UPDC was incorporated as a public limited liability company and certain assets held by UAC were transferred to UPDC via scheme of arrangement. UPDC’s shares were listed on the Nigerian Stock Exchange on November 19, 1998.
In a note recently signed by Godwin Samuel, UAC Company Secretary and Folake Kalaro, UPDC Company Secretary, they are considering an equity capital raise of N15.96billion by way of a rights issue to repay its short term debt obligations.
The Board of Directors believed that for UPDC to attain sustainability, the focus is on reducing outstanding debt to a level at which it is serviceable from reoccurring cash flows.
“This will require a significant cash injection which is to be raised through the Rights Issue. Post the Rights Issue, UPDC’s only interest-bearing obligation will be its long-term bond with total outstanding balance of N4.3billion”, the company said.
Meanwhile, the ownership structure reorganization will involve UPDC’s interest in UPDC Real Estate Investment Trust (UPDC REIT) being unbundled to UPDC shareholders via the allocation of REIT units directly to shareholders of UPDC in proportion to their post-Rights Issue holdings in UPDC (UPDC Unbundling).
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