UACN Plc Reduces Stake in Subsidiary, MDS Logistics Limited, to 43%

Must Read

Spectranet and Nokia to provide 100+ Mbps ultra broadband services with FTTH to home and business users in Nigeria

Nokia GPON solution helps Spectranet better serve its customers by adding FTTH services to its current portfolio of...

List of Guaranty Trust Bank Sort Codes & Branches (with addresses) in Nigeria

The sort code is a number which usually identifies both the bank and the branch where an account is...

Zenith Bank Earnings Update 9M-19: Rapidly driving e-banking volumes

Zenith Bank Plc (“ZENITH”) released its 9M-19 results earlier, showing a 3.5%y/y growth in Gross Earnings (GE) to N491.3bn....
- Advertisement -
- Advertisement -

On Tuesday, August 27, 2019, UAC of Nigeria Plc (hereafter referred to as “the Company”) notified the Nigerian Stock Exchange, Securities and Exchange Commission, Shareholders and the investing community of its proposed part-sale (Eight percent) of shares in MDS Logistics Limited (MDS) to Imperial Logistics Limited (the “Imperial Logistics”). This is expected to increase the equity stake of Imperial Logistics in MDS to 57% from 49% and has controlling interest in MDS logistics after the deal is consummated.

Under the terms of the Transaction, Imperial logistics will transfer selected profitable contracts to MDS and pay USD2.4 million in cash to UACN Plc. The transaction was based on a USD40 million equity value for MDS.

Read:  Nigerian Stock Exchange Organises Its 2nd Market Data Workshop

MDS is one of Nigeria’s leading integrated logistics provider which serves as a critical supply chain to some of Nigeria’s leading corporates while Imperial Logistics, is a company listed on the Johannesburg Stock Exchange in South Africa which mainly provides logistics in Africa and Eurozone, providing jobs over 25,000 people in 32 countries.

What’s in it for UACN

Upon completion of the deal, UACN will effectively lose controlling interest in MDS Logistics and cease to be Parent company of MDS, having reduced its stake by 8%. Thus, MDS becomes an associate company to UACN and the former’s financial result will be captured in UACN’s group account as income from an associate company (UACN to own 43% of MDS Logistics). Meanwhile, we expect the cash consideration to boost UACN’s cash position which could be used to offset its debt burden which the company aggressively paid
down in H1 2019. Also, we feel UACN’s move was strategic as it leverages on the expertise of Imperial logistic by allowing it to lead the business it has a comparative advantage in; hence, translating to higher profitability for UACN as profit from MDS increases.

Read:  Three Crowns Mum of the Year 2018 Enters Voting Stage…
Read:  SEC, NSE Streamline Listing Process to Encourage More Listings

We will keep you abreast of further development as the deal is still subject to regulatory approval.

- Advertisement -

Subscribe to BrandSpur Ng

Subscribe for latest updates. Signup to best of brands and business news, informed analysis and opinions among others that can propel you, your business or brand to greater heights.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Latest News

FAAC: States & Local Governments Received N186.81bn & N140.86bn Respectively in October 2019

The Federation Account Allocation Committee (FAAC) disbursed the sum of N693.52bn to the three tiers of government in October...

Ericsson Radio wins the Network Infrastructure Initiative of the Year  

Ericsson Radio System offers service providers a means to transition smoothly to 5G Telcos have the opportunity to invest in a solution that...

OPPO Launches High-End Reno2 Series in Nigeria to Empower Users’ Creativity (Photos)

November 13, 2019, Lagos, Nigeria – OPPO yesterday launched the new Reno2 Series in the Nigerian market by 7 pm at the LASWA Jetty,...

About 120 Million Nigerians Have Access To The Internet – New Poll Reveals

A new public opinion poll conducted by NOIPolls in the week commencing on October 14th, 2019 has revealed that 61% of Nigerians have access...

More Articles Like This