NSE okays N59b rights issue for Unilever Nigeria

The Nigerian Stock Exchange (NSE) has approved Unilever Nigeria PLC’s plan to raise N58.9 billion in new supplementary equity issue.

This will pave way for the fast-moving consumer goods company to round off the pre-offer process and open subscription to the new offer. According to the document obtained at the weekend by The Nation, Unilever Nigeria will be raising N58.9 billion in new equity funds by selling 1.962 billion ordinary shares of 50 kobo each to its shareholders at a price of N30 per share. The rights issue will be pre-allotted to shareholders in the register of the company as at the close of business on June 28, on the basis of 14 new ordinary shares for every 27 ordinary shares held. Shareholders of Unilever Nigeria had at the Annual General Meeting (AGM) in Lagos approved a proposal by the board of the company to raise up to N63 billion in new equity funds by selling new shares to its shareholders. In preparation for the rights issue, shareholders also increased the authorised share capital of the company to N5 billion or 10 billion shares through the creation of additional 3.95 billion ordinary shares of 50 kobo each.

Unilever Plc, United Kingdom, the majority core investor in Unilever Nigeria, is expected to provide about N35.4 billion in the capital raiser. It holds 60.06 per cent majority equity stake in Unilever Nigeria through its Unilever Overseas Holdings BV. Stanbic Nominees Nigeria Limited holds the second largest equity stake of 10.43 per cent in Unilever Nigeria. Unilever UK has shown sustained interest in increasing its majority shareholding in the Nigerian subsidiary. It mopped up additional shares through open market purchases at the NSE to increase its majority stake by 1.53 per cent from 58.53 per cent in 2015 to 60.06 per cent last year. It had also made open market purchases in 2015. Unilever UK will be required to contribute at least N35.35 billion to the rights issue to retain its shareholding and the multinational may increase its stake by applying for additional shares from renounced rights.

Unilever UK had earlier indicated it intended to acquire up to 75 per cent controlling equity stake in the Nigerian subsidiary. It had in first half of 2015 sought to increase its majority equity stake in the Nigerian subsidiary from 50 per cent to 75 per cent, citing long-term strategic importance of Unilever Nigeria to its global business. In a transaction initially valued at about N43 billion or £144.5 million, Unilever Overseas Holdings sought to increase its equity stake in the Nigerian company from 50.04 per cent up to a maximum of 75 per cent by buying additional shares from minority shareholders. The tender offer sought to acquire about 942.42 million ordinary shares in Unilever Nigeria at a price of N45.50 per share in cash. Unilever Overseas Holdings B.V. had said it was making the additional share acquisition as part of long-term strategic plan by the conglomerate as it believes that Nigeria offers significant growth potential.

“The Unilever Group has had a major presence in Nigeria for many years and continues to believe that the country offers significant growth potential. This makes Nigeria a strategic long term investment priority for Unilever Overseas. Globally, the Unilever Group is focused on investing in the foods, household and personal care categories and the long heritage and great brands of Unilever Nigeria in these categories in Nigeria make it attractive for Unilever Overseas to increase its holding in Unilever Nigeria, whilst maintaining its stock exchange listing,” Unilever stated.