Debt Refinancing: C&I Leasing to Float N10bn Bond
C & I Leasing Plc said it has perfected plans to raise N10 billion from the capital market through bond issuance.
The company explained that the objective of the issuance is to refinance its debt and boost capital structure.
MarketForces reported recently that companies are leveraging on the lower interest rate environment to restructure their debt book.
This pattern is as well common among deposit money banks that have been offloading expensive deposits in order to lower their funding costs.
Speaking at its second half 2020 result/outlook webinar, Mr Andrew Otike-Odibi, the Managing Director/Chief Executive Officer said the company’s immediate plan was to raise capital via bond issue of N10 billion to N13 billion.
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Otike-Odibi said the proposed bond had been approved by the company’s board and would hit the market very soon.
C & I Chief noted that the company was also considering an equity raising, and if approved by the board, would be in 2021. According to him, the company will come out with the right finance mix and will raise equity from its shareholders by 2021.
On COVID-19 effects and the way forward, Otike-Odibi said the company would develop human capital in line with the opportunity that came out of the lockdown.
He emphasises working remotely, said the company would invest in human capital development to enhance growth.
The MD said C & I would seek opportunities for growth to improve visibility to customers and potential business partners.
He said the COVID-19 pandemic had changed a lot of things in the last six months.
However, Otike-Odibi assured investors and shareholders that the company would make proper use of opportunities created by the pandemic.
He said the company would create new businesses from the array of opportunities that came out of the pandemic.
“We are looking to do a lot more in the digital space, to take advantage of the potentials created by COVID-19.
“We have a number of things we are looking at to deliver value to clients and shareholders over the next few months,” he said.
C & I reported a 5.9% decline in gross earnings to N15.3 billion from N16.3 billion achieved in the comparable period in 2019.
The company’s chief attributed the decrease to the effect of COVID-19 and the slide in oil price.
Explaining the development, Otike-Odibi said most of their clients requested price reductions in services provided.
Especially the international oil & gas companies and local logistics as well as outsourcing clients.
In the period, C & I net operating income settled at N3.8 billion compared with N4.6 billion posted in H1 2019.
Also, profit after tax declined 69.1% to N268 million from N866.9 million in the corresponding period last year.
Meanwhile, it reported 5.9% year to date growth in total assets to N59.5 billion from N56.2 billion.
The MD said the growth was largely driven by growth in cash and balances with banks due to proceeds from the rights issues, operating lease assets and other assets.
Also speaking, Mr Alex Mbakogu, Executive Director / Chief Financial Officer, said the company’s source of funding was well diversified.
Mbakogu said it cuts across banks, commercial papers (CPs) and other non-fixed income (CPs).
Debt Refinancing: C&I Leasing to Float N10bn Bond
