VFD Group Plc has said that its N50.67 billion Rights Issue will strengthen its capital base, fund expansion plans and increase investments in key subsidiaries.
Olatunde Busari, chairman of the Board of Directors, VFD Group while speaking on Wednesday at the signing cermony for the Rights Issues described the capital raise as a pivotal step in strengthening the Group’s capital base and advancing strategic growth agenda.
“Following careful deliberations and engagement with our advisers, the Board approved this Rights Issue — comprising 5,067,396,400 ordinary shares of 50 kobo each, offered at N10 per share, on the basis of 2 new shares for every 3 existing shares held.
“The proceeds of this offer, estimated at N49.55billion net of costs, will be strategically deployed to deleverage the Company’s balance sheet, fund our geographical expansion across the United Kingdom and Southern Africa, and increase investments in key subsidiaries,” Busari said.
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According to him, the capital raise reflects a continued commitment to building a stronger, more resilient, and diversified investment group which will enhance liquidity, improve leverage ratios, and position VFD Group to capture emerging opportunities across multiple sectors and regions.
The chairman extended appreciation to shareholders and advisors and regulators for their unwavering trust, professionalism, dedication and steadfast guidance and partnership throughout the process, adding that the Rights Issue marks the beginning of a new phase of growth, innovation, and value creation for our stakeholders.
The shareholders at the company’s 8th Annual General Meeting approved a capital raise of up to N30 billion, of which N12.5 billion has been successfully raised. Building on that momentum, the chairman said the shareholders during the 9th Annual General Meeting held on May 8, once again demonstrated their confidence in the vision by authorising the Board to raise additional capital of up to N50 billion through various instruments.
Nonso Okpala, General Managing Director, VFD Group Plc said that the company’s confidence in the current economy informed the decision to raise the fund, explaining that the economy has gained positive growth from where it was a few years ago.
“We think that the economic atmosphere of the country has positioned us to raise this amount. If you look at this time three years ago, you find out that it will not be more comfortable to raise such an outage today.
“We think that the economy is opening up, we think opportunities are leveraging. We know that respective sectors are raising funds and the formation of their capital is stable and the opportunities abound. We will take advantage of the opportunities that lie in the country,” Okpala said.
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He praised the federal government for the reforms and policies that have been put in place since the commencement of the administration
Okpala further said, “We look forward to getting the best of it. The economy is in the right direction. There are short term pain that we must deal with and I think the government is sensitive to those pains but for an economic and opportunity stand point there is a lot we can take advantage of.
“If you look at the insurance sector, the capital market and banking the sectors are being revitalised and you can see their level of profitability,” adding that VFD Group is positioning itself to drive most of the developmental reforms and leverage some of the reforms leading in the area of investment company sectors.