By Udeme Ekwere Monday, 11 Oct 2010   

DEAP Capital Management and Trust Plc has indicated plans to embrace merchant banking as its new core area under its ongoing restructuring process.A statement by the company on Friday said that there was the need to review its operations and focus more on its area of strength.

 

The Managing Director/Chief Executive Officer of the company, Mr. Emmanuel Ughoh, said that the decision was reached at a recent retreat involving participants from all arms of the company, including DEAP Capital, Resort Savings & Loans Plc, Resort Securities & Trust Limited, DVCF Oil & Gas Plc and Resort Developers Limited.

 

He said,”During the retreat an assessment of the impact of the global economic meltdown on the company in the past two years was made. A major issue that ran through each group discussion was the review of the current business model of DEAP Capital, with a view to remodeling it or defining a new corporate direction for the company and the key business drivers.

 

”In this respect, therefore, it was concluded that since all its range of services as a company which include funds/portfolio management, issuing house/financial advisory services, proprietary trading and leasing are functions reserved for merchant banks, under the new bank categorisation recently issued by the Central Bank of Nigeria, the company should put plans in place to metamorphose into a merchant bank within the next two years.”

 

According to him, there was an overwhelming consensus of opinion from all the syndicate groups that DEAP Capital had been affected by the rapid change in the regulatory and operating environment in the past two years.He said this underscored the need to review its products with a view to having an identifiable core business and business model that will be clear and unambiguous to all its stakeholders.

 

Ugboh also noted that the board had put in place a two-year plan of capitalisation for DEAP Capital to move from its current paid-up capital of N750m to the target amount of N15bn, through the issue of ordinary shares, preference shares and long-term convertible bonds by the end of 2012.

 

Source:Punch