UACN Property Development Company Plc yesterday reported a loss of N15.883 billion for the year ended December 31, 2019, compared with a loss of N15.057 billion in 2018. Details of the audited results made available, showed it recorded revenue of N2.157 billion in 2019, down from N2.303 billion in 2018.
Net financing cost stood at N2.61 billion as against N4.76 billion in 2018, while the company ended with a loss after tax of N15.883 billion, compared with N15.057 billion in 2018. UPDC, which is subsidiary of UAC of Nigeria Plc has been having a rough patch and remains a drain on the fortunes of the conglomerates.
As part of efforts to resuscitate its operations, the company recently raised about N15.962 billion through a rights issue.
A total of 15.962 billion ordinary shares of 50 kobo each were issued to shareholders at N1.00 per share. Before the right issue, UAC of Nigeria had last year announced a strategic initiative the involving a recapitalisation and restructuring of UPDC.
UACN had explained that it was in the process of a strategic review, evaluating its performance and its subsidiaries. The objective is to achieve sustainable positive financial performance from its existing operations and enable management focus on businesses that align with its strategy.
"In reviewing UPDC, the board weighed the long-term opportunities in the Nigerian real estate sector against the fundamental differences between the cashflow profile and capital needs of UPDC versus other entities in UAC's portfolio. Following its review, the board concluded that it would be in the best interest of respective stakeholders of UACN and UPDC if UACN's equity interest in UPDC is 'unbundled' such that UACN no longer holds any shares in UPDC and UPDC operates as a standalone legal entity, free to source appropriately structured capital," the company said.
On the other hand, the board and management at UPDC have focused on developing strategies to stabilize UPDC's capital structure and unlock value for shareholders. Hence, two significant strategic initiatives, recapitalisation and a concurrent restructuring, are being proposed.
The company said: "Pursuant to the UAC Unbundling, the ordinary shares that UACN holds in UPDC post-rights issue will be transferred pro-rata to all UACN shareholders, who will hold such UPDC shares in addition to their existing equity interests in UACN.
"UACN will cease to be a shareholder in UPDC, and UPDC will cease to be consolidated UACN's financial statements."
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