Deap Capital Management Plans Strategic Growth Initiatives
Deap Capital Management & Trust Plc is set to enhance its financial outlook through a combination of capital-raising initiatives, debt restructuring, and the onboarding of a strategic investor. These moves were highlighted during the company’s 12th Annual General Meeting held in Lagos.
Strategic Measures for Growth
Chairman Kenneth Olise, represented by non-executive director Edmond Ani, addressed the significant challenges the firm has faced in the past decade. The current restructuring efforts aim to stabilize operations and restore value for shareholders. A crucial part of this strategy includes negotiations to resolve the company’s outstanding debts, which have escalated dramatically from approximately N685 million to over N1.8 billion due to prolonged legal proceedings. Ultimately, the parties reached a settlement of N400 million.
Conversion of Liabilities into Equity
In a significant move approved by the Securities and Exchange Commission (SEC), part of the company’s liabilities will be converted into equity. This restructuring will see debts totaling N2.03 billion transformed into 1.49 billion ordinary shares, priced at N1.35 per share. The share allotment process is currently in progress and expected to conclude by the end of the first quarter of 2026. Creditors opting for this conversion will receive their shares through the Central Securities Clearing System (CSCS).
Strategic Investment and Restructuring
In addition, Deap Capital has entered into a strategic investment agreement with Banklink Africa Private Equity Limited, which is expected to inject at least N3 billion into the company. This investment will bolster its recapitalization efforts and enhance its positioning as a global non-bank financial services company focused on investment banking.
The chairman further indicated that the company has resumed timely reporting of quarterly and annual financials to key regulators, including the Nigerian Exchange Limited (NGX) and SEC, following several years of non-compliance. The combination of debt restructuring, new capital injections, and operational reforms is anticipated to greatly improve the firm’s financial situation. Shareholder equity is projected to shift from a negative N2.75 billion as of September 2022 to a positive N2.37 billion by March 2026.
Shareholder Approvals and Future Directions
Shareholders at the meeting approved a significant increase in the company’s share capital from N1.5 billion to N5.03 billion through the issuance of an additional 7.06 billion shares. The company plans to pursue a capital raising exercise, possibly through private placements or other approved financing methods, pending regulatory approval.
Additionally, shareholders approved a name change from Deap Capital & Trust Plc to the Critical Minerals Financing Corporation Plc, or another name sanctioned by the Corporate Affairs Commission. The introduction of the core investor is expected to lead to a restructuring of the board to align with the new ownership structure, which may require some current directors to step down.
Outlook and Shareholder Engagement
Responding to shareholders’ concerns, Olise noted early signs of recovery, emphasizing a gradual rise in the company’s share price for the first time in many years. While it is important for investors to expect dividend distributions, the immediate goal is to stabilize operations and rebuild the company after a series of challenges. He appreciated shareholders for their patience and ongoing support as Deap Capital strives for sustainable growth and long-term value.
For additional details about Deap Capital’s rebranding as CMFC Plc with a focus on critical minerals finance, click here.
This article outlines Deap Capital Management’s strategic initiatives, which are critical to its effort to reposition itself in the financial industry. By effectively addressing its debt situation and attracting fresh capital, the company aims to ensure a stable and profitable future while enhancing shareholder value.
