Ellah Lakes Plc has proudly announced the receipt of regulatory approval from the Securities and Exchange Commission (SEC) for a momentous financial undertaking—an additional capital infusion of N2.90 billion through a rights issue. This monumental development was shared through an official statement submitted to the Nigeria Exchange Limited (NGX), further solidifying Ellah Lakes’ commitment to its growth and expansion strategies.
The official communication, signed by OAKE Legal (Company Secretary), outlines the pivotal details of this significant financial maneuver. Ellah Lakes is initiating a Rights Issue comprising 1,000,000,000 Ordinary Shares, each valued at 50 Kobo, with an offering price of N2.90 per share, collectively amounting to N2.90 billion in capital. This initiative underscores the company’s ambitions to fortify its financial resources, thereby opening up new avenues for future growth and development. Nevertheless, it’s essential to note that the success of this rights issue is contingent upon the approval of the pertinent regulatory authorities.
A section of the statement articulates the following:
Ellah Lakes Plc (the Company) is elated to inform its esteemed Shareholders, Stakeholders, the Nigerian Exchange Limited (“The Exchange”), and the wider public that the Company has secured the blessing of the Securities Exchange Commission (“SEC” or the “Commission”) to proceed with the formalization of the proposed Rights Issue, encompassing 1,000,000,000 Ordinary Shares, each valued at 50 Kobo and offered at N2.90 Per Share. This offering will be conducted on the basis of one (1) new ordinary share for every two (2) ordinary shares held.
The Qualification Date for the Rights Issue has been slated for the 10th of February 2023. Conditional upon the SEC’s approval of the executed offer documents, the application list is anticipated to open on the 9th of October 2023, or on any other date that receives the Commission’s endorsement, and will remain accessible for a maximum period of 28 days. Shareholders will receive the rights circular, and application forms will be conveniently accessible through the company’s Registrars’ website, streamlining the application process.
In line with this momentous development, the company strongly encourages its esteemed shareholders to liaise with their stockbrokers and other financial advisors to obtain comprehensive insights into the particulars of this offer.
Understanding Rights Issue
A rights issue is a strategic financial maneuver aimed at providing the existing shareholders of a company with the opportunity to acquire additional shares. This type of issue grants the existing shareholders the “right” to purchase new shares at a discounted rate compared to the prevailing market price, on a predetermined future date.
Importantly, shareholders are not obligated to exercise this right; it is at their discretion. This flexible approach allows companies to utilize the capital raised through these offerings for various purposes, such as acquiring assets, facilitating takeovers, repaying debts, or safeguarding the company from financial instability.
This strategic move is expected to bolster the company’s financial position and create avenues for capital reallocation, enabling the management to embark on revenue-boosting and profit-maximizing initiatives, projects, and strategies. By enhancing the balance sheet and freeing up capital, Ellah Lakes is poised for sustainable growth and a promising future.
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