N2.2 Trillion Boost: 11 Firms Tap Capital Market Amid Economic Challenges
Details:
In a bold move to navigate Nigeria’s challenging economic landscape, 11 listed companies raised over N2.2 trillion in fresh capital on the Nigerian Exchange Limited (NGX) in 2024. The funds, aimed at addressing foreign exchange (FX) losses, strengthening balance sheets, and expanding operations, reflect the resilience of businesses despite inflationary pressures and FX volatility.
Key Highlights of the Capital Raising
1. Japaul Gold: Secured N20 billion to solidify its position as a leader in the mining industry.
2. VFG Group: Raised N12.5 billion for long-term investments, with strategic plans to explore cross-border growth opportunities.
3. Wema Bank: Completed a N40 billion recapitalization exercise to meet the Central Bank of Nigeria’s (CBN) requirements.
4. Jaiz Bank: Mobilized N10.04 billion through a private placement, achieving compliance with CBN’s revised capital benchmarks.
5. Nigerian Breweries: Raised N599.1 billion via a rights issue, targeting FX debt repayment and operational funding.
6. International Breweries: Secured N588 billion to settle U.S. dollar-denominated loans and enhance working capital.
7. Notore Chemical Industries: Added N105.79 billion through a private placement for operational improvements.
8. Ella Lakes: Obtained N2.90 billion via a rights issue to strengthen its market position.
9. Tantalizers: Raised N1.07 billion as part of its ongoing restructuring.
10. Royal Exchange: Secured N1.56 billion to enhance business efficiency.
11. Sovereign Trust Assurance: Contributed to the financial resilience seen in the capital markets.
Economic Context
The fundraising activities come amid severe FX pressures, with businesses struggling to maintain profitability. Notably, Dangote Sugar and other firms incurred FX losses exceeding N400 billion in the first half of 2024 due to naira devaluation. This underscores the fragile balance between operational performance and external economic factors.
Stakeholders’ Perspectives
• Eric Akinduro, President of Ibadan Zone Shareholders Association:
“The FX crisis and inflation severely impact profitability. A supportive environment is critical for businesses to thrive.”
• David Adonri, Vice President of Highcap Securities:
“The success of equity capital raising highlights investor confidence in Nigeria’s capital market as a viable avenue for growth.”
Outlook for 2025
Operators remain optimistic, projecting improved investor confidence and market performance as firms continue leveraging the NGX to navigate economic headwinds. Recapitalization efforts reflect strategic moves to foster financial stability and operational expansion, even in challenging times.
The Road Ahead: As businesses and stakeholders align to bolster economic growth, 2025 could mark a defining year for the Nigerian capital market.
Details:
In a bold move to navigate Nigeria’s challenging economic landscape, 11 listed companies raised over N2.2 trillion in fresh capital on the Nigerian Exchange Limited (NGX) in 2024. The funds, aimed at addressing foreign exchange (FX) losses, strengthening balance sheets, and expanding operations, reflect the resilience of businesses despite inflationary pressures and FX volatility.
Key Highlights of the Capital Raising
1. Japaul Gold: Secured N20 billion to solidify its position as a leader in the mining industry.
2. VFG Group: Raised N12.5 billion for long-term investments, with strategic plans to explore cross-border growth opportunities.
3. Wema Bank: Completed a N40 billion recapitalization exercise to meet the Central Bank of Nigeria’s (CBN) requirements.
4. Jaiz Bank: Mobilized N10.04 billion through a private placement, achieving compliance with CBN’s revised capital benchmarks.
5. Nigerian Breweries: Raised N599.1 billion via a rights issue, targeting FX debt repayment and operational funding.
6. International Breweries: Secured N588 billion to settle U.S. dollar-denominated loans and enhance working capital.
7. Notore Chemical Industries: Added N105.79 billion through a private placement for operational improvements.
8. Ella Lakes: Obtained N2.90 billion via a rights issue to strengthen its market position.
9. Tantalizers: Raised N1.07 billion as part of its ongoing restructuring.
10. Royal Exchange: Secured N1.56 billion to enhance business efficiency.
11. Sovereign Trust Assurance: Contributed to the financial resilience seen in the capital markets.
Economic Context
The fundraising activities come amid severe FX pressures, with businesses struggling to maintain profitability. Notably, Dangote Sugar and other firms incurred FX losses exceeding N400 billion in the first half of 2024 due to naira devaluation. This underscores the fragile balance between operational performance and external economic factors.
Stakeholders’ Perspectives
• Eric Akinduro, President of Ibadan Zone Shareholders Association:
“The FX crisis and inflation severely impact profitability. A supportive environment is critical for businesses to thrive.”
• David Adonri, Vice President of Highcap Securities:
“The success of equity capital raising highlights investor confidence in Nigeria’s capital market as a viable avenue for growth.”
Outlook for 2025
Operators remain optimistic, projecting improved investor confidence and market performance as firms continue leveraging the NGX to navigate economic headwinds. Recapitalization efforts reflect strategic moves to foster financial stability and operational expansion, even in challenging times.
The Road Ahead: As businesses and stakeholders align to bolster economic growth, 2025 could mark a defining year for the Nigerian capital market.