Enterprise to raise US$50m through Right Issue
Enterprise Group is expected to raise additional US$50 million through a Right Issue on the capital market to support the company’s growth agenda of expanding into the West Africa region.
This announcement comes after the company in June announced that, it has changed its strategic partner “Sanlam Emerging Markets Proprietary Limited of South Africa in three of its subsidiaries, Enterprise Life, Enterprise Insurance and Enterprise Trustees, to Black Stars Holding Limited (BSHL) which is a company owned by Leapfrog Strategic African Investments (LSAI).
The approval for the Right Issue was given at the Annual General Meeting (AGM) of the company held on Tuesday 8, 2017 in Accra.
The issue according to the board chairman of the Group Trevor Trefgarne, “is intended to Ghana cedi equivalent of the $50 million and shareholders are entitled to take up their pro-rata entitlement at a price issue of GHS6.00 per share which is the effective value of Enterprise Group as established by the aforementioned transaction.”
This meant that the share value of Enterprise group which was being traded on the Ghana Stock Exchange as of Tuesday 8, 2017 at GHS2.68 per share will automatically during the right issue will go up to GHS6.00 per share.
According to the board chairman, the GHS6.00 per share was reached based on an advised from Boulders Advisors Limited, who stated that the terms used in valuing the company’s shares to the current figure was fair and reasonable.
In view of this, a resolution was also passed at the AGM to now increase the Company’s authorize shares from 200,000,000 to 1,000,000,000 in connection to the proposed Right Issue as per the regulations governing the GSE and Company’s Act.
Speaking to the B&FT after the AGM the Chief Executive Officer of Enterprise Group Limited Keli Gadzekpo said it might take them up to about three months to organize themselves for the Right Issue to take place.
“To be honest this process can take us about two to three months to organize ourselves in terms of going through the process at the Ghana Stock Exchange, the Securities and Exchange Commission. We are hopefully to raise this amount to help us progress with the growth and expansion agenda for Enterprise.”
Mr. Gadzekpo added that, after the Right Issue, if there is still some shares remaining, the strategic partner Black Star Holdings Limited which is jointly owned by Leapfrog Investments and Prudential Financial Inc. of America, will take the rest up at a value of GHS6.00.
He described 2016 as an exciting and ultimately successful but somewhat difficult. The Group recorded a Net Income of GHS420.6 million representing a growth of 20.4%, with the underlying core insurance businesses delivering a growth of 21.4%. The company also recorded a Profit After Tax of some GHS68 million which represented 31.9%.
Return On Equity and Return On Assets were 14.6% and 9.4% respectively, with both representing improvement on prior year’s which were 13.3% and 9.2% respectively.
In 2016, earnings per share of GHS0.207 in prior year are attributable to Enterprise Group members.
Meanwhile Net decrease in cash and cash equivalents was GHS74.8 million and cash and cash equivalents held at year end were GHS130.6 million.
The 2016 financial report showed that, growth was driven by investments in properties of 34.5% to GHS176.2 million as two major projects underway neared completion. Investments Securities grew 20.9% in account of the good yield received on Fixed Income.
Mr. Gadzekpo said “we look forward to a very successful year driven by possibilities presented by the environment, and our new and very promising partnership with LSAI and PFI. We aim to work towards realising those possibilities for the benefit of our Shareholders in 2017 and beyond.”