Deap Capital Unveils N3 Billion Strategic Investment Plan and Debt Restructuring
Deap Capital Management & Trust Plc has revealed a comprehensive restructuring initiative, including a N3 billion strategic investment plan and the conversion of N2.03 billion in debt to equity. This move aims to fortify the company's financial standing and reposition it for sustainable growth in the competitive non-bank financial services sector.
Restructuring Efforts and Debt Settlement
At the company's 12th annual general meeting held in Lagos, Chairman Kenneth Olise, represented by Non-Executive Director Edmond Ani, detailed the firm's turnaround strategy. Olise acknowledged that Deap Capital had faced significant operational and financial challenges over the past decade but is now implementing measures to stabilize operations and restore shareholder value.
As part of the restructuring, the company engaged in negotiations with the Asset Management Corporation of Nigeria (AMCON) to address outstanding debts. Initially, the liability had escalated from approximately N685 million to over N1.8 billion due to court proceedings. However, both parties eventually reached a full and final settlement of N400 million, resolving the dispute.
Debt-to-Equity Conversion and Share Allotment
With approval from the Securities and Exchange Commission (SEC), Deap Capital has converted part of its liabilities into equity. Specifically, debts valued at N2.03 billion are being transformed into about 1.49 billion ordinary shares, each valued at 50 kobo, at a conversion price of N1.35 per share.
The share allotment process is currently underway and is expected to be completed before the end of the first quarter of 2026. Creditors who opted for this conversion will receive their shares through the Central Securities Clearing System (CSCS), facilitating a smoother transition to equity ownership.
Strategic Investment and Capital Injection
In a significant boost to its recapitalization efforts, Deap Capital has secured a strategic investment agreement with Banklink Africa Private Equity Limited. This partnership is set to inject at least N3 billion into the company as equity, supporting its goal to become a globally competitive non-bank financial services firm with a focus on investment banking activities.
Olise emphasized that this fresh capital, combined with the debt restructuring, is crucial for repositioning the company and enhancing its market competitiveness.
Operational Reforms and Regulatory Compliance
The company has also resumed the prompt filing of quarterly and annual returns with key regulators, including Nigerian Exchange Limited and the Securities and Exchange Commission. This follows several years of non-compliance prior to the current management taking office in 2023, marking a positive shift towards transparency and accountability.
Olise projected that the combined impact of these initiatives will significantly improve Deap Capital's financial position. Shareholders' funds are expected to shift from a negative balance of N2.75 billion recorded in September 2022 to a positive position of approximately N2.37 billion by March 2026.
Share Capital Increase and Name Change
As part of the broader restructuring program, shareholders approved a proposal to increase the company's share capital from N1.5 billion, represented by three billion ordinary shares of 50 kobo each, to N5.03 billion. This will be achieved through the creation of an additional 7.06 billion ordinary shares of 50 kobo each.
Additionally, the company plans to raise further capital through private placement, subscriptions, or other approved financing arrangements, subject to regulatory approvals. Shareholders also endorsed a proposal to change the company's name from Deap Capital Management & Trust Plc to Critical Minerals Financing Corporation Plc, or any other name approved by the Corporate Affairs Commission, reflecting its evolving strategic focus.
