eTranzact adopts holding structure, to raise fresh capital
eTranzact International Plc has secured approval from its shareholders to raise N5.77 billion additional capital from the bond market and restructure into a holding company.
Proceeds of the bond, which would be raised via a private placement of irredeemable convertible unsecured bonds, would be channeled to its “transformation agenda” and to beef up its capital base.
At its yearly general meeting held in Lagos last week, the shareholders also granted the board of directors an approval to restructure the company as a holding company to operate with two or more subsidiaries. The restructuring has been necessitated by the Central bank of Nigeria (CBN)’s new regulatory framework.
The new subsidiaries would carry out mobile money business, switching and other specific businesses in the payment ecosystem, the company said.
Speaking at the AGM, Chairman of the Board, Wole Abegunde, said the planned additional capital was “due to the objection raised by the regulators to the application during the right issue” and that the proceeds would enable the company to meet the capital requirement and drive its transformation process.
“We are poised and committed to being a regional leader in the medium-term and, in the long-term, a global leader in the electronic and mobile payment services that are compliant with globally recognized standards,” he said.
Managing Director of the Company, Olaniyi Toluwalope, said the outlook of the firm “is bright” just as Nigeria’s payment system had a huge opportunity for growth and the innovation eTranzact represents.
“The payment landscape in Nigeria is showing signs of growth; and the electronic payment adoption rate is picking up. Government, through the Central Bank of Nigeria (CBN), is already putting in place, robust policies and frameworks to sustain and accelerate the pace of adoption in the payment landscape,” he said.
However, he noted that consumers remained cautious about privacy and security issues. He suggested that discounts, loyalties and other value options would help to drive the usage.
“We are introducing more intuitive product offerings with a more robust user experience for the consumer. We are thinking ahead on how best to facilitate government and internally generated revenue (IGR) collections. Our revamped CorporatePay and BankIT solutions are being adopted by more ministries, departments and agencies (MDAs) and corporate organisations,” he disclosed.
The company recorded a turnover of N22.72 billion last year, a 10 per cent decline from N25.19 billion recorded the preceding year. Its profit after tax (PAT) also dropped by 741 per cent to N1.87 billion.
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