Prestige Assurance to clear N775m retained losses via share reconstruction
Prestige Assurance has commenced effort at returning to profitability and boosting its equity value with new commitment to clean up its books for profitability and dividend payment.
The move to erase mounting N775 million negative retained loss, will not only give room for higher performance, better equity pricing and share price growth, it will further create new investment opportunities for investors with commitment to record profit.
Prestige Assurance has thus begun taking necessary steps towards re positioning for profitability as it moves to reconstruct its share capital.
Share reconstruction is often times used by firms to decrease the number of shares outstanding, but not the value of shares held by shareholders. Companies also use this mechanism to increase their share price proportionately without affecting the total book value of those shares.
A market bulletin obtained by Daily Times capital market correspondent on Wednesday, from the Nigerian Stock Exchange (NSE) revealed that Prestige Assurance has applied for a “No Objection” to its proposal to reduce the company’s share capital.
The bulletin, which was signed by the Acting Head of Listings Regulation Department, Godstime Iwenekhai also noted that Prestige’s share capital would be reduced from N2.7billion being 5.4bn ordinary shares of 50 kobo each to N1.9bn being 3.8bn ordinary shares of 50 kobo each in the issued and fully paid up ordinary shares of the company.
“The share capital so reduced will be applied in writing off the capital of the Company which is lost or unrepresented by available assets.” The statement said.
Prestige explained that the essence of the capital reconstruction is to enable the company to wipe out its accumulated retained losses of N776,511,000.
It stated further, that the reconstruction will reposition the company on a trajectory for subsequent accumulated retained profit, create more value for its shareholders, allow the company to declare a dividend and improve its perception in the market thereby making it more competitive.
Afolabi Adesola
