By Chinyere Joel-Nwokeoma
Lagos, Aug. 3, 2020 The Custodian Investment Plc has signed a binding agreement with UAC of Nigeria Plc to purchase 51 per cent equity interest in UACN Property Development Company (UPDC) Plc.
Mr Wole Oshin, Group Managing Director, Custodian Investment, made this known in a statement posted on the Nigerian Stock Exchange (NSE) on Monday in Lagos.
Oshin said the company had signed a binding agreement with UAC for Custodian to purchase a 51-per cent equity interest in UPDC from UAC.
He said the agreement marked the beginning of a partnership between Custodian and UAC that would achieve both companies’ respective objectives in the real estate industry.
“It also marks a significant milestone aligned with UAC’s strategy to focus on its core businesses,” he stated.
Oshin said a total of 9,465,584,668 UPDC Ordinary shares (Sale Shares) held by UAC, representing 51 per cent of UPDC’s issued share capital, would be sold to Custodian.
He said the sale shares would be in two tranches initial sale of 946,558,467 shares, representing 5.10 per cent of the issued share capital of UPDC, on execution of binding transaction agreements.
Oshin added that there would be subsequent sale of 8,519,026,201 shares, representing 45.90 per cent of the issued share capital of UPDC upon receipt of requisite approvals.
According to him, completion of the sale is subject to regulatory approvals from the NSE and the Federal Competition and Consumer Protection Commission.
Commenting on the transaction, Oshin said the partnership would provide multiple levers for value creation.
“We, at Custodian, are excited about the possibilities arising from this partnership with UAC, which provides multiple levers for value creation.
“The rationale for the transaction is that Custodian and UAC share the view that their ambitions for capturing opportunity in the real estate industry will be better achieved working in partnership,” he said.
Oshin, however, advised the shareholders to exercise caution when dealing in the securities of Custodian, UAC, and UPDC until requisite approvals are obtained.
Also, Mr Folasope Aiyesimoju, the Group Managing Director of UAC, said the transaction was a significant step in achieving its objectives for UPDC.
“The transaction is a significant step in achieving our objectives for UPDC.
“In 2018, the Board and Management of UAC embarked on a strategic review to evaluate the performance of the company and its subsidiaries.
“The objective is to achieve sustainable positive financial performance from our existing operations and enable management to focus on businesses that align with our strategy.
“In reviewing UPDC, the board weighed the long-term opportunities in the Nigerian real estate sector against the fundamental differences between the cash flow profile and capital needs of UPDC and those of the other entities in UAC’s portfolio.
“Following its review, the board concluded that it would be in the best interest of UAC to exit its interest in the real estate sector.
” It allows UPDC to operate as a stand alone legal entity, free to source appropriately structured capital and to unlock value for its shareholders,” Aiyesimoju said.