As part of Transnational Corporation Plc’s proposed share reconstruction, the total number of issued ordinary shares of the company will be reduced by consolidating the issued shares at a ratio of 1 for 4.
This was contained in the company’s explanatory statement to the Nigerian Exchange Limited seen by Nairametrics.
According to the statement, the reconstruction will result in the cancellation of three out of every four shares held by Transcorp’s shareholders and a reduction of the issued share capital to N5,080,998,787.00, comprising 10,161,997,574 ordinary shares of N0.50 each.
The company noted that it has received the “No Objection” of the Financial Reporting Council of Nigeria (FRCN) and the Securities and Exchange Commission (SEC) in respect of the reconstruction.
It noted that upon receipt of the approval of Transcorp’s shareholders, an application will be made to the Federal High Court for confirmation of the reconstruction, subsequent to which the remainder shares of the company will be re-registered with the SEC.
It is proposed that the share capital of the company be reconstructed as follows:
- The share capital of the Company would be reduced to ₦5,080,998,787.00 (Five Billion, Eighty Million, Nine Hundred and Ninety-Eight Thousand, Seven Hundred and Eighty-Seven Naira), by the reduction of the issued shares from 40,647,990,293 (Forty Billion, Six Hundred and Forty-Seven Million, Nine Hundred and Ninety Thousand, Two Hundred and Ninety-Three) ordinary shares to 10,161,997,574 (Ten Billion, One Hundred and Sixty-One Million, Nine Hundred and Ninety Seven Thousand, Five Hundred and Seventy-Four)ordinary shares. This implies a cancellation of 30,485,992,719 (Thirty Billion, Four Hundred and Eighty-Five Million, Nine Hundred and Ninety-Two Thousand, Seven Hundred and Nineteen) ordinary shares of N0.50 (Fifty Kobo) each in the Company whilst maintaining the nominal value of the ordinary shares.
- Further to the reduction, the number of remaining shares will be 10,161,997,574 (Ten Billion, One Hundred and Sixty-One Million, Nine Hundred and Ninety-Seven Thousand, Five Hundred and Seventy-Four) ordinary shares of ₦0.50 (Fifty Kobo) each. Effectively, the share capital of the Company will stand at N5,080,998,787.00 (Five Billion, Eighty Million, Nine Hundred and Ninety-Eight Thousand, Seven Hundred and Eighty-Seven Naira). Furthermore, the balance of ₦15,242,996,359.50 (Fifteen Billion, Two Hundred and Forty-Two Million, Nine Hundred and Ninety-Six Thousand, Three Hundred and Fifty-Nine Naira and Fifty Kobo) (which at the present time represents the capital of the shares that are to be cancelled), will be credited to a special reconstruction reserve. This reserve is established to safeguard that balance for future shareholder distributions (as may be applicable) or for allocation toward value-enhancing endeavors.
- It is important to note that following the Reconstruction exercise, shareholders of Transcorp will hold the same proportion in the Company’s ordinary share capital relative to each other as they did immediately before the exercise, thus ensuring that there is no dilution of shareholding of the shareholders. The Central Securities Clearing System (CSCS) accounts of shareholders whose names appear on the Company’s register of members as at the effective date following the order of the Court will be adjusted accordingly shortly after the date approved by the Court (the “Effective Date”). For holders of shares in certificate form, the existing Transcorp share certificates will become null and void on the Effective Date and new share certificates will be re-issued to them as at the Effective Date.
- An application would be made to the Nigerian Exchange Limited (the NGX) to place the shares of Transcorp on full suspension following receipt of the SEC’s confirmation of registration of the reconstructed shares. During the suspension period, all relevant adjustments to the number of shares held by each shareholder shall be effected.
- Concurrently, there will be a proportional upward adjustment in the quoted share price of Transcorp’s shares on the NGX which will be reflected when the suspension is lifted on the company’s shares. Consequently, the company’s market capitalization (being the number of shares in issue multiplied by the market share price) and percentage holding in Transcorp by each shareholder will not change as a result of the proposed Reconstruction. This is without prejudice to any subsequent movement in the share price.
Treatment of fractional shares
The company noted that prior to the reconstruction becoming effective, Transcorp shareholders holding shares that will result in fractional shares post-reconstruction will have them rounded up to the nearest whole number.
Provision for dematerialized and non-dematerialized shareholdings
As of the effective date of the reconstruction, the company said shareholders who have dematerialized their holdings with the CSCS will automatically have their shares adjusted directly in their respective CSCS accounts.
It stated that shareholders who have their shares placed under a lien with the CSCS will also automatically have their shares adjusted directly into their respective CSCS account.
According to the company, in accordance with the SEC directive on dematerialization of share certificates, shareholders who do not have valid CSCS accounts will have their shares credited at the CSCS using a non-tradeable Clearing House Number (CHN), against the previously used Registrar Identification Number.
- “A nontradeable certificate Clearing house Number is a number allocated to shareholders who do not have CSCS account numbers to warehouse their units of shareholding in public companies under the Registrar’s custody at the CSCS.
- The allotted shares will be transferred to the stockbroking account of the shareholder once valid CHN and CSCS account numbers are provided. Any shareholder who does not have a valid CHN and CSCS account number, is advised to open a stockbroking account with a stockbroker and obtain a valid CHN and CSCS account number from the stockbroker,” they said.
