C&I leasing, Nigeria’s only publicly listed leasing firm, is eyeing to pump in more investments into its marine business as the company seeks to boost revenue and reward its shareholders.
By increasing its investments in the marine sector, the firm anticipates to grow revenue at an average of 18.48 per cent within the next five years, Andrew Otike-Odibi, Chief Executive Officer, for the leasing firm said.
“We see the marine sector as a promising one, and we intend to put more money behind that sector which will impact positively on the overall performance of the business,” Odibi said last week, in the firm’s headquarters in Lagos.
N3.2 billion Right Issues.
C & I Leasing Plc has commenced the process to raise N3.2 billion equity capitals through Rights Issuance to fund the acquisition of offshore vessels for marine and oil business expansion.
The firm is issuing 539,003,333 ordinary shares of 50 kobo at N6 per share. The capital raise will enable the company, strengthen its financial position in order to enhance its capital structure for optimum performance; provide working capital support in a timely manner; and capture potential attractive growth opportunities.
The right issuance was open for subscription to both existing and on the 18th of November is expected to close on the 27th of December 2019.
According to Odibi, most of the proceeds from the N3.2 billion will be going into business expansion particularly the marine sector, which will, in turn, reflect on the overall performance of the business.
The firm’s boss noted that the right issues have so far gotten maximum subscription form both shareholders and non-shareholders of the business.
“Most of our existing shareholders have been very positive which has been very encouraging for us. We have also gotten some non-shareholders who have indicated interest which is also a sign of positive developments,” he said.
Last year, the company’s board approved a N20 billion debt issuance programme, the first leg of which (a N7 billion issuance) was oversubscribed by 33 per cent. The latest N3.2 billion rights issue is a part of that 5-year fixed-rate senior secured bond.
Odibi said the company has succeeded in making three payments to the trustees without defaults on the dates. “That speaks volumes about the business and the cash flow we generate,” he said
The company forecast its revenue to hit N33.67 billion in full-year 2019. With this, the firm said its revenue would continue at 18.46 per cent to N66.34 billion by 2023, supported by increased volumes in its Nigeria, Ghana and the United Arab Emirates divisions.
In its 9month audited financial statement, C&I reported a slight drop in Profit before Tax (PBT) by 6.7 per cent to N1.20 billion, from N1.288 billion reported the same period in the year before. This was despite reporting a surge of 33.7 per cent in gross earnings from N19.86 billion to N26.55 billion.
Odibi said the slight decline in PBT, was as a result of two of its vessels which were out for maintenance. He noted that these vessels were back in business, and would impact positively when its full-year 2019 scorecards eventually drop.
The firm also anticipates a simultaneous rise in shareholders’ funds from N13.68 billion in 2019 to N34.57 billion in 2023, which will be substantiated by a 466 per cent growth in retained earnings.
According to Odibi, the future growth forecast was not based on how the company has operated in the last three years, but it’s based on the investment (financial and non-financial transaction) that has been within the past periods.