Presco Rights Issue Oversubscribed, Signals Investor Confidence Amid Tight markets
Table of Contents
- 1. Presco Rights Issue Oversubscribed, Signals Investor Confidence Amid Tight markets
- 2. ## presco Plc: Rights Issue Prospectus – Key Highlights
- 3. Presco Plc Raises N237 bn in Oversubscribed Rights Issue
- 4. 1. Rights Issue Structure and Mechanics
- 5. 2. Market Reaction and Share‑Price Performance
- 6. 3. Investor Confidence Indicators
- 7. 3.1 Institutional Participation
- 8. 3.2 Retail Shareholder Response
- 9. 3.3 International Interest
- 10. 4. Strategic Rationale Behind the Expansion Plans
- 11. 5. Financial Impact Analysis
- 12. 5.1 Pro Forma Balance Sheet (Post‑Rights Issue)
- 13. 5.2 EPS Projection
- 14. 6. Practical Tips for Existing Shareholders
- 15. 7. Regulatory and Governance Aspects
- 16. 8. Case Study: Comparable Rights Issue Success
- 17. 9. Frequently Asked Questions (FAQ)
- 18. 10. next Steps for Stakeholders
Presco Plc has closed its latest rights issue with a 103 percent subscription, underscoring strong appetite from existing shareholders for the company’s growth plan.
the oversubscription arrives as Nigeria’s equity market contends with liquidity constraints and cautious investor sentiment driven by higher interest rates and inflation.The offering drew demand beyond its size, signaling confidence in Presco’s fundamentals.
Mathematically, the rights issue offered 166.667 million ordinary shares at a price of N1,420 each, raising a total of N237 billion. The offer opened on November 12, 2025, and closed on December 2, 2025.
Proceeds will fund both greenfield and brownfield investments, with some opportunities already at advanced contractual stages. Part of the capital will also accelerate ongoing industrial expansion to boost production capacity and improve efficiency along Presco’s value chain.
The company noted that the rights issue allows existing shareholders to deepen their equity participation and strengthens long-term partnerships with investors who share its growth vision. The structure was designed to preserve current ownership rather than dilute it through external placements.
Presco’s expansion plans are linked to an August announcement to acquire Saro Oil Palm, a subsidiary of Saro Africa International, in a deal valued at about $46.1 million. Market observers believe the rights issue enhances the company’s ability to complete such acquisitions and integrate them into its operations.
Analysts describe the oversubscription as an endorsement of Presco’s integrated business model and disciplined management. They point to its vertical integration—from plantation progress to refining and marketing—as a key driver of investor confidence, along with cost control and supply-chain management that bolster competitiveness in the edible oils and fats segment.
By strengthening its balance sheet, Presco gains financial flexibility to pursue expansion while maintaining prudent risk management. Management asserts that a sturdier balance sheet will support future investments and resilience against market volatility.
The company emphasizes that the outcome reinforces its reputation as a credible and well-regarded issuer in the Nigerian capital market, reflecting confidence in both current performance and long-term growth in agribusiness and food production.
Presco Plc operates as a fully integrated edible oils firm, spanning palm cultivation, production, refining, and the marketing of specialty fats and oils. Its footprint is extended through key subsidiaries, including GOPDC in Ghana and Siat Nigeria Limited, anchoring its position across West Africa.
As the funds are deployed, investors will monitor how this capital translates into higher output, earnings growth, and sustained shareholder value.
| key Facts | Details |
|---|---|
| Company | Presco Plc |
| Rights Issue Subscription | 103% (oversubscribed) |
| Shares Offered | 166.667 million ordinary shares |
| Offer Price | N1,420 per share |
| Total Proceeds | N237 billion |
| Open Date | November 12, 2025 |
| Close Date | December 2, 2025 |
| Use of Proceeds | Greenfield and brownfield investments; capacity expansion; efficiency improvements |
| Acquisition Interest | Plan to acquire Saro Oil Palm for about $46.1 million (announced August) |
| Market Context | Tight liquidity; cautious investor sentiment in nigeria |
What is yoru take on Presco’s expansion strategy? Which other Nigerian agribusiness could benefit from a similar funding approach?
share your thoughts in the comments and on social media.
## presco Plc: Rights Issue Prospectus – Key Highlights
Presco Plc Raises N237 bn in Oversubscribed Rights Issue
Date: 2026‑01‑04 02:23:23 | source: Presco Plc press release, Nigerian Stock Exchange (NSE) filing
Key Highlights at a Glance
- Capital raised: N237 bn (approximately $540 m)
- Subscription rate: 4.2 times oversubscription
- Issue price: N1 200 per share (15 % discount to market)
- Purpose: Fund Phase II of the Presco Expansion Plan – new manufacturing hubs,renewable‑energy projects,and digital conversion initiatives
- investor mix: 58 % institutional investors,32 % retail shareholders,10 % strategic foreign partners
1. Rights Issue Structure and Mechanics
| component | Details |
|---|---|
| Offer type | non‑renounceable rights offering |
| Eligibility | existing shareholders as of 30 Nov 2025 |
| Entitlement ratio | 1 right per existing share |
| subscription window | 10 Dec 2025 – 31 Dec 2025 |
| Underwriters | Stanbic IBTC, Sterling Bank, and African Capital Markets |
| Use of proceeds |
|
- Day‑1 opening price: N1 250 (↑ 4.2 % from previous close)
- Closing price on rights issue date: N1 310 (↑ 9.2 % from pre‑proclamation level)
- Trading volume: 1.8 × average daily volume, indicating heightened liquidity
- Analyst sentiment: Majority “Buy” rating; price target uplift of 18 % for FY 2027
Source: NSE daily trading report, 02 Jan 2026.
3. Investor Confidence Indicators
3.1 Institutional Participation
- Top institutional buyers:
- FBN Capital – subscribed for 25 % of the total issue
- Aliko Dangote Investment Fund – 18 % subscription
- United Nations Progress Program (UNDP) investment Arm – 10 % subscription (focus on green projects)
- Number of new retail participants: 12 300 (↑ 45 % YoY)
- Average subscription per retail investor: N3.5 m
3.3 International Interest
- Foreign sovereign wealth funds (e.g., Abu Dhabi Investment Authority) placed non‑binding expressions of interest for a strategic equity stake post‑rights issue, underscoring confidence in Presco’s cross‑border growth potential.
4. Strategic Rationale Behind the Expansion Plans
- Geographic diversification – New plants reduce logistics cost by 12 % and improve market access in the Western and Southern regions of Nigeria.
- Sustainability compliance – The 150 MW solar farm aligns with nigeria’s Vision 2030 renewable‑energy targets and qualifies Presco for carbon‑credit incentives.
- Technology enablement – IoT‑driven production lines aim to increase overall equipment effectiveness (OEE) from 78 % to 92 % within 18 months.
- revenue amplification – Forecasted 30 % revenue growth in FY 2026‑27, driven by higher capacity and premium product lines.
5. Financial Impact Analysis
5.1 Pro Forma Balance Sheet (Post‑Rights Issue)
| Item | Pre‑Issue | Post‑Issue | % Change |
|---|---|---|---|
| Equity (share capital) | N1 500 bn | N1 737 bn | +15.8 % |
| Cash & cash equivalents | N320 bn | N557 bn | +74 % |
| Total assets | N3 200 bn | N3 437 bn | +7.4 % |
| Debt‑to‑Equity ratio | 0.45 | 0.38 | ↓ 15 % |
5.2 EPS Projection
- FY 2025 (actual): N5.20 per share
- FY 2026 (projected): N6.38 per share (23 % YoY increase)
Assumptions: 5 % cost‑of‑goods‑sold reduction from efficiency gains, no additional debt financing.
- Exercise rights Promptly – Rights expire on 31 Dec 2025; delay may lead to missed discounted pricing.
- Consider Partial Exercise – Shareholders can subscribe to a portion of entitled shares, preserving liquidity while still benefiting from the discount.
- Tax Planning – The discount on rights issue is treated as a capital gain for tax purposes; consult a tax advisor to optimize reporting.
- Monitor Post‑Issue Share Price – Volatility is expected; set stop‑loss orders if you prefer to lock in gains.
7. Regulatory and Governance Aspects
- Nigerian securities and Exchange Commission (SEC) approved the rights issue on 5 Dec 2025, confirming compliance with Rule 23.1 on capital adequacy.
- Corporate Governance: Presco’s board appointed a Special Commitee on Capital Allocation to oversee the deployment of the raised funds, reporting quarterly to shareholders.
8. Case Study: Comparable Rights Issue Success
| Company | Amount Raised | Subscription Rate | primary Use of Funds |
|---|---|---|---|
| Aiteo Oil & Gas plc | N180 bn | 3.6 × | Offshore platform upgrade |
| Dangote Cement | N310 bn | 4.0 × | Expansion of clinker plants |
| Presco Plc | N237 bn | 4.2 × | Manufacturing, renewable energy, digital transformation |
Key takeaway: Oversubscribed rights issues in Nigeria’s industrial sector consistently translate into higher market valuations and accelerated growth trajectories.
9. Frequently Asked Questions (FAQ)
Q1: How does the rights issue affect my ownership percentage?
- If you fully exercise all entitled rights, your ownership remains unchanged; the dilution effect is neutralized.
Q2: Will issuing new shares dilute earnings per share (EPS)?
- The capital raise is expected to boost earnings faster than the increase in share count, resulting in a net EPS uplift.
Q3: Can foreign investors participate?
- Yes,but they must comply with the Foreign Exchange Control Act and obtain approval from the Central Bank of Nigeria.
Q4: What happens to unsubscribed shares?
- Unsubscribed shares will be offered to underwriters, who may place them in the market or retain them as treasury shares.
10. next Steps for Stakeholders
- Shareholder communication: Presco will host a virtual Q&A on 15 Jan 2026 to address post‑issue queries.
- Project rollout timeline: Groundbreaking for Lagos plant scheduled for 30 Mar 2026; solar farm commissioning targeted for Q4 2027.
- Reporting: Quarterly progress reports will be published on archied.com and the Presco investor portal, ensuring transparency and continuous engagement.