Kayode Tokede writes on the recent share reconstruction exercise embarked upon by Transnational Corporation Plc on the Nigerian Exchange and its benefits to shareholders Transnational Corporation(Transcorp) Plc recently announced the successful completion of its share reconstruction, a strategic action aimed at maximising long-term shareholder value. Nigeria’s leading conglomerate’s share reconstruction involved a consolidation of the total number of issued shares at a ratio of 1 to 4, reducing the total issued and fully paid shares of Transcorp Group from 40.6 billion shares to 10.
2 billion shares. While the number of shares reduced pro rata, the total value of shareholders’ investments remain unchanged with no dilutive impact to shareholders. The company in a statement on the Nigerian Exchange Limited (NGX) said that the reconstruction would result in the cancellation of three out of every four shares held by Transcorp’s shareholders and a reduction of the issued share capital to N5,080,998,787.
00, comprising 10,161,997,574 ordinary shares of N0.50 each. The share reconstruction initiative by Transcorp offers several potential benefits for investors part of which include enhanced share value, improved financial ratios, simplified capital structure and potential for future capital raising exercise.
When the reconstruction was completed on October 28, 2024, the stock price of Transcorp increased to N48.60 per share on NGX from N11.00 per share.
The share reconstructio.