Abraaj to convert $10m loans in C&I Leasing to equity

Abraaj to convert $10m loans in C&I Leasing to equity

C &I Leasing has announced plans by Abraaj Group, managers of the Aureos Africa Fund, to convert its $10 million loan stock to the company to equity.

The company explained in a regulatory filing to the Nigerian Stock Exchange, NSE, that the $10 million was an unsecured, coupon redeemable, convertible loan stock that matured at the end of 2018.

C & I Leasing had last year raised N7 billion bond as part of a series of planned activities aimed at enhancing its overall competitive positioning. The funds have since been invested in expanding its marine business, purchase of new vehicles for the fleet management business and a restructure of some of its more expensive debts. Nigerian Stock Exchange Investment analysts have said the company stands to record improved performance as it moves to expand its operations to boost its current business lines.

Commenting on the loan-equity conversion, Mr. Andrew Otike-Odibi, Managing Director/CEO, C & I Leasing, said: “This development is positive for our business as it improves the capital structure of the company and helps position it favourably for additional capital raise from the market in first quarter of 2019.”

Trading of equities on the Nigerian Stock Exchange, NSE was generally bearish on the first trading day of 2019 as the market posted a weak performance following sell-offs in Dangote Cement Plc, Nigerian Breweries Plc and Access Bank Plc.

“Existing as well as potential investors have very bright prospect following business opportunities the company is planning to tap into in order to deliver regular returns in the years ahead. We have evolved from being a simple consumer finance leasing company to a diversified, operating lease company with presence in six states in Nigeria with investments in Ghana and Dubai,” he added.

The company’s shares are among the few that delivered positive capital appreciation in the stock market last year. While the market suffered a decline of 17.8 per cent in 2018, C & I Leasing shares gained 37.9 per cent.

As the leasing industry is still expected to blossom even further, owing to various government initiatives aimed at re-inflating the economy and the increasing relevance of leasing to capital formation, focus on agriculture will create an extensive market for the leasing business, as a whole range of equipment would be required across the agriculture value chain, analysts said.

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