By Udeme Ekwere

Monday, 10 Jan 2011

Capital market operators that had hitherto suspended their plans to raise their capital base have resumed fundraising activities with the takeover of the bad debt of most banks in the country by the Asset Management Corporation of Nigeria.

Findings by our correspondent showed that some capital market operators who had been on the sidelines, waiting for the outcome of the activities of AMCON, had already initiated their fund raising bids.

Others are also tidying up their offer prospectus to take advantage of the positive outlook which has enveloped the market since the inauguration of the AMCON board.

Moreover, with the recent directive by the Securities and Exchange Commission that operators should beef up their capital base, the market may soon witness more fundraising activities, as some finance companies are also sourcing for equity financing off-shore.

For instance, a prospectus obtained by our correspondent showed that Profund Securities Limited, a member of the Nigerian Stock Exchange, was currently raising about N3bn through Rights Issue and Private Placement.

Specifically, the firm intends to raise about N2.384bn from the Right Issue and about N600m via the private placement.

PSL, which is a subsidiary of Trust Fund Pension Plc, has the General Secretary of the Nigeria Labour Congress, Mr. John Odah as its Chairman.

The offer document, obtained by our correspondent on Friday, hinged the firm‘s decision to approach the market now on the fact that the capital market was beginning to gain momentum.

It argued that the major indices were beginning to move northwards and investors were gradually returning to the market.

The offer document explained further, ”The operations of the AMCON coupled with availability of funds are catalysts and opportunities for strategic trading. The confidence which is gradually but steadily returning to the market, will be buoyed by the current wave of holistic risk management philosophy which is pervading the banking and non-banking financial sectors.

”PSL will further elevate risk processes, practices and methods by integrating risk management as part of overall performance measurement and enduring strict compliance with regulations.”

Source: Punch