Unilever works on shares buy back
As Unilever Nigeria is working on raising fresh capital through rights issue, cross section of market stakeholders have pointed that the company is keyed to the determination of the parent company to increase its holding in the Nigerian subsidiary.
Meanwhile Unilever Nigeria’s second quarter result for the period ended 30 June 2017, released recently by the Nigerian Stock Exchange (NSE) reflected growth in key performance indices as revenue rose by 3.43 per cent quarter on quarter to N22.93 billion, also accounting for 47.99 per cent growth year on year.
The result also showed that profit before tax(PAT ) increase to N2.86 billion in second quarter , reflecting growth by 31.38 per cent quarter on quarter and 4000 per cent growth year on year, even as explanations were yet to be forwarded by the company on key drivers of the growth.
According to the result, Unilever’s Profit after tax ballooned to N2.07 billion, an increase by 29.37 per cent q/q and 3000 per cent y/y on lower base effect
Daily Times Nigeria recalls that Unilever Nigeria Plc is currently undertaking N58.9bn Rights Issue and during the period recorded remarkable result, different from its similar comparative results.
Unilever recently revealed that following shareholder approval received in May, the company has received clearance of the issue documents from the Securities and Exchange Commission and the Nigerian Stock Exchange (The NSE) in respect of the Rights Issue.
The transaction, the company revealed is part of its strategy to drive sustained and steady growth despite economic headwinds.
The company plans to raise N58,851,275,010 by way of rights to existing shareholders, on the basis of 14 new shares for every 27 shares held by shareholders, whose names appeared in the register of members of the Company as at 28 June 2017 at an issue price of N30 per share.
Meanwhile, the company’s headquarters earlier announced that its share buyback programme expected to have commenced in May.
Unilever PLC and Unilever N.V, announced that a programme to buy back shares with an aggregate market value equivalent to €5 billion, as previously announced on 6 April 2017, commenced on 19th May
According to the company, the programme is in line with the Group’s objective of targeting a net debt to EBITDA ratio of 2.0x.
The buy-back will be conducted in both Unilever PLC and Unilever N.V. ordinary shares. Under the terms of the programme, between €1.5 billion and €2.5 billion will be bought back on the London Stock Exchange in the form of Unilever PLC ordinary shares, and the balance of the aggregate €5 billion will be bought back on Euronext in Amsterdam in the form of Unilever N.V. ordinary shares (or depositary receipts in respect of such ordinary shares).
The buy-back programme will take place within the limitations of the authority granted to the Boards of each of Unilever PLC and Unilever N.V. by their respective general meetings held in April 2017, pursuant to which the maximum number of shares to be bought back by Unilever PLC is 128,345,000 and the maximum number of shares (or depositary receipts thereof) to be bought back by Unilever N.V. is 223,024,384.
The buy-back programme, the purpose of which is to reduce the capital of Unilever PLC and Unilever N.V., respectively, will also be conducted within the parameters prescribed by the Market Abuse Regulation 596/2014, the Commission Delegated Regulation (EU) 2016/1052 and, in the case of Unilever PLC, Chapter 12 of the Listing Rules.
The programme will commence on 19 May 2017 and will end no later than 15 December 2017. The Group has entered into non-discretionary instructions with Deutsche Bank AG, London Branch and UBS AG, London Branch to conduct the share buy-back programme on its behalf and to make trading decisions under the programme independently of the Group.
