Ellah Lakes Plc, has received approval from the Securities Exchange Commission (SEC) to raise an additional N2.90 billion capital. This comes after the lleading agricultural company proposed a rights Issue of 1,000,000,000 ordinary shares of 50 Kobo each at N2.90 Per Share which brings the total value of the capital to N2.90 billion.
A rights issue, according to Investopedia,the world’s leading source of online financial content, is an invitation to existing shareholders to purchase additional new shares in the company,also known as subscription warrants. This type of issue gives existing shareholders the right to purchase new shares at a discount to the market price on a stated future date.
The company, in a statement notifying its shareholders and stakeholders of the significant development, explained that the proposed rights issue involves the issuance of 1,000,000,000 ordinary shares of 50 Kobo each at the price of N2.90 per share.
Ellah Lakes said shareholders will have the opportunity to acquire one new ordinary share for every two ordinary shares they currently hold, noting that the qualification date for the rights issue has been set for the 10th of February 2023.
It added that, pending the approval of the executed offer documents by the SEC, the application list is scheduled to open on October 9, 2023. However, this date may be subject to alteration if approved by the Commission, and it will remain open for a maximum period of 28 days.
To ensure accessibility and convenience for shareholders, the company said that it will distribute rights circulars providing detailed information about the rights issue. Furthermore, application forms will be made available on the company’s registrar’s website.
The company also encouraged its shareholders to reach out to their respective stockbrokers and financial advisors for further information and guidance regarding the rights issue.
The development marks an important step for Ellah Lakes Plc, as it seeks to strengthen its financial position and pursue its growth objectives in the agricultural sector.
It is also expected to strengthen the company’s balance sheet, and free up capital for the management to execute revenue, and profit-optimisation projects, plans, and strategies.