Shareholders approve unbundling of UPDC’s UPDC REIT

Shareholders of UACN Property Development Company (UPDC) Plc on Monday approved the scheme for the unbundling of UPDC’s equity stake in UPDC Real Estate Investment Trust (UPDC REIT). Both UPDC and UPDC REIT are quoted on the Nigerian Stock Exchange (NSE).

At the court-ordered meeting yesterday in Lagos, which was streamed virtually in line with COVID-19 protocols, shareholders considered and approved the scheme for the unbundling as they voted through proxies and online links.

UPDC has a total of 1.516 billion ordinary shares of 50 kobo each in UPDC REIT, which the real estate company is seeking to unbundle.

In September 2019, the boards of directors of UACN and UPDC jointly announced three significant strategic initiatives, including a Rights Issue to recapitalise the business, plans for UACN to transfer UACN’s equity interest in UPDC pro-rata to UAC’s shareholders (UPDC unbundling), and plans for UPDC to unbundle the UPDC REIT to its shareholders (UPDC REIT unbundling).

The N16 billion UPDC Rights Issue was successfully completed in April 2020, proceeds of which were used to reduce borrowing costs and significantly improve UPDC’s capital position.

In the process of the unbundling initiatives, UACN stated that it received a credible offer from Custodian, which compelled the board to re-evaluate the planned approach to deconsolidate UPDC and influenced the board’s decision to proceed with the sale of a portion of UACN’s interest in UPDC to Custodian, effectively putting an end to the UPDC unbundling.