• Friday, March 29, 2024
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New shareholding structure to attract more equity for growth – CEO C&I Leasing

C&I Leasing’s gross earnings hit N16bn in Q3

The acquisition of additional shares of Nigeria’s only listed leasing firm, C&I Leasing by Peace Mass Transit (PMT) in Nigeria’s, will translate into attracting more equity funding for the business, Andrew Otike-Odibi, managing director/CEO, C&I Leasing plc said.

The business has grown significantly on debt and retained earnings, and the impact of this has been felt on its return on investment as a lot is being paid out as funding cost. However, the business has reached the point where it’s saying that to experience additional growth, it would not want to do that on borrowed funds but on a combination of equity and debt, Otike-Odibi said

“The acquisition doesn’t have an impact in terms of funding or capital injection into the business, he said. “What it does is that, when the conversion is done, it then helps the capital structure of the business such that the loan stocks are converted into equity and that helps the equity base of the business,” according to Otike-Odibi

“We see it as the birth of a new C&I Leasing. We expect that with the MD of PMT coming on board, he will bring in new ideas that will take the business to greater heights. The management and board of C&I Leasing are excited with the development,” he added.

Read Also: Peace Mass Transit becomes largest shareholder in CI leasing with 65-67% equity

Peace Mass Transit, a transport company with an interest in Banking, Oil & Gas, Pharmaceuticals, Agro Chemicals and Auto Assembly, had acquired 313,326,316 units of unsecured variable coupon redeemable convertible loan stock in registered units of N4.75 each of C&I Leasing Plc, representing about 55.82 percent of the issued shares of the Company.

The acquisition came following the successful exit of Actis LLP (Actis), a private equity investment firm, which invested in C&I Leasing Plc in 2010. Actis exited its stake in C&I Leasing through a trade sale of its loan stock with all the rights to Peace Mass Transit.

Otike-odibi noted that prior to the acquisition, PMT was holding a 20 percent stake in C&I Leasing, after into an October 2019 Right Issues of the firm. However, upon final conversion of the loan stock into equity, Peace Mass Transit would become the single largest shareholder in C&I Leasing Plc with equity around 65-67 percent.

Otike-Odibi who spoke at a virtual press conference, Wednesday, said the transportation company is familiar with the operations of C&I Leasing, with its managing director having a proven track record of excellence hence, its position as the largest shareholder in the company, should add great value.

“PMT has been in business almost the same time as C&I and has been run successfully to its current size by its MD/CEO, Sam Maduka Onyishi, Chairman and MD/ CEO. We are excited from the C&I Leasing side because he is an entrepreneur with clear investment objectives; and has a lot of experience in running businesses.”

“We are confident that the new acquisition will open up more opportunities to raise further equity in the business, impacting positively on the company, the staff, the shareholders and the customers as well,” Otike-odibi said.

Mid last year, C&I Leasing Plc rolled out plans to raise at least N10 billion through a bond issuance programme from the debt market to strengthen its capital structure.

Otike-odibi noted it is a refinancing bond, as the firm aims to replace its short term debt with 5-7 year debt, stabilize its cash flows, and helping the liquidity position of the business as it can structure the repayment over a long period of time.

“However, going forward the business will be a combination between debt and equity, which is why we said the conversion gives an inroad into raising more equity,” Otike-odibi

C&I Leasing is looking at tapping into opportunities in the digital space, in 2021, after the coronavirus pandemic hit hard on its business last year, causing a decline in revenue.