By Chukwuma Umeorah
Transnational Corporation Plc (Transcorp) has proposed a share consolidation seeking to reduce its number of issued ordinary shares.
The planned share capital reconstruction, subject to shareholder approval, will be executed in accordance with Sections 130 – 133 of the Companies and Allied Matters Act 2020 (CAMA).
According to a corporate announcement filed with the Nigerian Exchange Limited (NGX), “The move is part of Transcorp’s broader corporate strategy and growth plan, designed to enhance share pricing and outlook through improved per-share metrics.”
Presently, Transcorp boasts a share capital of N20,323,995,146.50, divided into 40,647,990,293 ordinary shares valued at N0.50 each. The reconstruction entails a consolidation of issued ordinary shares, with a proposed ratio of 1 for 4. This translates to the cancellation of three out of every four ordinary shares held by shareholders.
Consequently, the total issued share capital is slated to reduce significantly to N5,080,998,787.00, comprising 10,161,997,574 ordinary shares of N0.50 each.
Explaining the details of the reconstruction, Transcorp stated, “The reduction in the number of shares in issue aims to maintain the nominal value of the ordinary shares while safeguarding the balance for future shareholder distributions or value-enhancing endeavors.” Shareholders will retain their proportionate ownership in the company post-reconstruction, ensuring no dilution of shareholding.
The company added that it has secured the initial “No Objection” of both the Financial Reporting Council of Nigeria (FRCN) and the Securities and Exchange Commission (SEC) in relation to the reconstruction pending shareholder approval at the company’s Annual General Meeting (AGM).
The Board has also appointed and authorised United Capital Plc and Vetiva Advisory Services Limited as Financial Advisers to provide the shareholders with all the information the Board considers to be material to the shareholders in deciding whether or not to approve the resolutions for the Reconstruction and to explain the provisions and effect.
Upon shareholder approval, the Company will seek confirmation of the reconstruction from the Federal High Court. Subsequently, the remaining shares will be re-registered with the SEC.