By Patrick Onoja investadvocate

Nov 30 2010 16.40 GMT

Lagos (INVESTADVOCATE)-Abbey Building Society Plc (ABBEY) is to shore up its Capital Base to the tune of N20 billion. This was contained in a notice by the company Monday November 29 2010 to the Nigerian Stock Exchange (NSE) in Lagos Nigeria.

 

Following an Extraordinary General Meeting (EGM) held Wednesday November 24 2010; shareholders of the company authorised its Board of Director (BOD) to raise the fund whether by way of   Public Offering, Placing, Rights Issue, Book Building process or other methods.

 

This the shareholders affirmed should be by way of issuance of shares, convertible or non convertible loans, stock, medium term notes, bonds or other securities, in such tranches, series or proportions, at such coupon or interest rates, within such maturity periods and on such other terms and conditions including the provision of security for payment, as the Directors may deem fit or determine, subject to obtaining the approvals of relevant regulatory authorities.

 

Abbey had earlier this year through the NSE announced that it has secured a $10 million (1.5 billion) convertible loan from the Netherlands Development Corporation Company also identified as FMO.

 

As earlier reported, Rose Ada Okwechime, Managing Director/Chief Executive Officer (MD/CEO) of the Primary Mortgage Institution (PMI) had affirmed that Abbey would use the loan in enhancing housing and mortgage facilities for cooperatives with good track records; support bona fide Estate Developers as well as Corporate Organisations in their housing needs.

 

Also, the Company got AFRICINVEST Financial Sector Limited of Tunisia to invest in the equity of Abbey to the tune of Euro1.25 million and Euro1.25 million convertible loan in April, 2008.

 

Also in October year 2009, Abbey took a facility loan of $5 million from Shelter Afrique of Nairobi, Kenya. The Company had affirmed that the loan will enable it further strengthen its core business of mortgage lending and construction finance in Nigeria.

 

The question is with all these loans, why is Abbey seeking to raise a N20 billion fresh capital?

 

Prior to this time, Abbey had posted a loss of 20 .82 percent (20.82%)  in the Unaudited third Quarter (Q3) result for  2010 Financial Year  released August 23 2010 at the Floor of the NSE.

 

 

In the Profit and Loss information, the Unaudited Q3 (July) 2010 result of the company showed that Profit After Tax (PAT) declined from N440.200 million in Q3 of year 2009 to N348.539 million in the review period of year 2010 indicating a loss of 20.82%.

 

 

While Profit Before Tax (PBT) also dropped from N503.353 million in year 2009 to N400.620 million in the review period of year 2010 showing a drop of 25.64 percent (25.64%).

 

 

Abbey recorded a Turnover of N1.164 billion in the Q3 of year 2010 compared to N1.126 billion recorded in the same period of year 2009 representing a slight increase of 3.37 percent (3.37%) in the period under review.

 

Meanwhile, the company was supposed to be getting ready to release its Financial Year End (FYE) result for 2010; but they rather applied and got approval from the Central Bank of Nigeria (CBN) to change its Financial Year End; which they notified the Exchange Tuesday October 12 2010.