Shareholders seek minority investors’ protection on loan conversion

Shareholders of C&I Leasing Plc. have urged the company to protect the interest of minority shareholders in the conversion of the $10 million loan to equity for Neoma Africa Fund (formerly Aureos African Fund).

The shareholders, who unanimously approved the conversion at the company’s Extra-Ordinary General Meeting (EGM) in Lagos, on Tuesday, also called for quick implementation of the exercise.

The shareholders also approved the conversion of the $10 million unsecured variable coupon redeemable convertible loan stock in registered units of N4.75 or the dollar equivalent units into 987,500,000 ordinary shares of the company.

Founder, Independent Shareholders Association, Sunny Nwosu, sought the protection of the interest of minority shareholders in the arrangement, urging that the price should be adjusted upward from N4.75, as most of the shareholders purchased the shares at N6.

He added that the board should ensure that arrangements made would benefit all parties involved. Agreeing, the Coordinator, Noble Shareholders, Robert Egbe, called on the board and management to ensure quick implementation of the conversion arrangement, urging other shareholders to collaborate toward moving the company forward, as it cannot bear the burden of the debt again, thus rallied support for the proposals.

Responding to the shareholders concerns, the company’s Chairman, Henry Okolo, explained that the exchange rate for the conversion was pegged at N197 three years ago, while the present exchange rate and unit cost of the share at N3.20 was an advantage to the company.

He assured the shareholders of higher return in the years ahead, adding that the conversion was expected to happen before the end of the year.

“We expect that this would significantly strengthen the balance sheet of our company,” Okolo said. Recall that in January 2019, C&I Leasing announced that Abraaj, the managers of the Aureos Africa Fund, agreed to convert the $10 million loan stock in the quoted company to equity. The loan was obtained by the Nigerian firm and it matured in 2018.

C&I Leasing has been in operation for over two decades and has since evolved from being a simple finance leasing company licensed by the Central Bank of Nigeria in 1991, to becoming a diversified leasing and business service conglomerate providing support services to various indigenous and multinational organisations in West Africa.