UPDATE 15 Dec: The Initiates Plc share offer has been extended from 12 December to 12 January, according to this announcement on the company’s website
Listed waste management company The Initiates Plc in Nigeria aims to raise NGN 10.1 billion ($7 million) capital through a hybrid share offer, combining a rights offer to its existing shareholders and a public offer. Both offers opened on 5 November and are set to close this Friday, 12 December.
The Initiates Plc (TIP) was founded in 1995 and listed on the NGX in 2016. It has over 30 years’ experience in hazardous and non-hazardous waste management, industrial cleaning, environmental consultancy, and pollution control. It specializes in the oil and gas industry and has operations in Uganda’s oil and gas.
The public offer of just over 932 million ordinary shares which are on sale at NGN9.50 per share, to raise NGN 8.85bn ($6.1m). The rights offer to existing shareholders (1 new ordinary share for every 5 shares held) is for nearly 178m shares at NGN 7 each, to raise another NGN 1.2bn ($0.85m). It opened on 5 November. The nominal value of the ordinary shares is NGN 0.50 each. Applications must for in multiples of 1,000 shares.
If successful, the offer will double the market capitalization (at the offer price of NGN 9.50) from NGN 8.5bn before the issue to NGN 17.3bn after.
According to this report in Business Day: “This.. is a strategic initiative aimed at strengthening the company’s capital base to support business expansion, acquisition of modern waste management equipment, investment in innovative technologies and enhancement of operational efficiency across Nigeria and Sub-Saharan Africa”. It has operations in Uganda and Namibia.
The prospectus can be obtained by the circuitous route of clicking a link about a third of the way down the public offer application form which can be accessed on the company’s website – maybe a direct link would be better so that investors read the prospectus and other relevant information first. According to the prospectus, NGN 8.6bn of the capital raised after expenses will be spent on waste management and cleaning equipment, including a $1m rotary kiln incineration plant and two $1m thermal desorption plants, as well as robots, skips, trucks and a waste water treatment unit.
The share has been in a top three performers on the NGX, starting the year at a share price of NGN 2.50 and climbing up 480% to end September (when it was NGN 14.60) and at close today (7 December, it was NGN 11.50)
Jude Chiemeka, CEO of the NGX, said: “they have very strong performance metrics and have done very well as a growth board-listed company. From what we’ve heard today, they do have an aspiration to move on to the main board of the exchange, which stands at NGN 4bn. We’re really delighted that they came nine years ago, and now they are coming back to utilize the market. It just testifies to the strength of our market”, according to a report on Nairametrics.
In its page on African Financials, TIP says “Our core business activities encompass comprehensive waste management services, including E-waste management, and specialised industrial cleaning and decontamination services. With a strong operational base in Nigeria, particularly in the Port Harcourt and Kwale regions, The Initiates PLC serves both private and public sectors, with a significant footprint in the demanding Oil and Gas Industry. The company also holds a minority investment of 36% in The Initiates Uganda Limited, signifying an international presence and potential for further global expansion”. The page also summarizes recent financial performance.
The company’s offer documents include an investor presentation which says there are growth opportunities because of tighter environmental laws driving demand for professional waste management and rising activity in manufacturing, construction and energy. Nigeria is also following global trends and “embracing waste recycling and green compliance” while there are also growing opportunities for public private partnership (PPP). It sees opportunities in Uganda, Ghana, Cameroon and Côte d’Ivoire.
The issuing house is Anchoria Advisory Services and the joint issuing house is Fundvine Capital & Securities. They aim to publish the allocation statement on 14 January and to list the new shares on the NGX on 23 February, according to the prospectus. The offer is not underwritten.
(Photo: Dismantling electronic waste, copyright, kindly supplied by The Initiates Plc)