You are advised to read and understand the contents of this Rights Circular. If you are in any doubt about the actions to be taken, you should
consult your Stockbroker, Accountant, Banker, Solicitor, or any other professional adviser for guidance immediately.
For information concerning certain risk factors which should be considered by prospective investors, see Risk Factors on pages 19 to 22
RC: 200303
RIGHTS ISSUE
OF
336,855,291
ORDINARY SHARES OF 50 KOBO EACH AT
₦4.00
ON THE BASIS OF FOUR (4) NEW ORDINARY SHARES FOR EVERY SEVEN (7) ORDINARY SHARES
HELD AS AT THE CLOSE OF BUSINESS ON 21 AUGUST, 2019
PAYABLE IN FULL ON ACCEPTANCE
ACCEPTANCE LIST OPENS: MONDAY, 11 NOVEMBER 2019
ACCEPTANCE LIST CLOSES: WEDNESDAY, 18 DECEMBER 2019
THE RIGHTS BEING OFFERED ARE TRADEABLE ON THE FLOOR OF THE NIGERIAN STOCK EXCHANGE FOR THE
DURATION OF THE RIGHTS ISSUE
LEAD ISSUING HOUSE
RC: 264978
JOINT ISSUING HOUSE
RC: 1297664
This Rights Circular and the securities which it offers have been cleared and registered by the Securities & Exchange Commission. It is a civil wrong and
a criminal offence under the Investments and Securities Act No 29, 2007 (“the Act”) to issue a rights circular which contains false or misleading
information. Clearance and registration of this Rights Circular and the securities which it offers do not relieve the parties from any liability arising under
the Act for false and misleading statements contained therein or for any omission of a material fact. Investors are advised to note that liability for false
or misleading statements or acts made in connection with the Rights Circular is provided in sections 85 and 86 of the Investments and Securities Act No
29, 2007 (the “Act”)
THIS RIGHTS CIRCULAR IS DATED FRIDAY, 25 OCTOBER 2019
1
1. TABLE OF CONTENTS
1. TABLE OF CONTENTS ……………………………………………………………………………………………………………………….2
2. DEFINITION OF TERMS …………………………………………………………………………………………………………………….3
3. CORPORATE DIRECTORY ………………………………………………………………………………………………………………….5
4. ABRIDGED TIMETABLE …………………………………………………………………………………………………………………….6
5. SUMMARY OF RIGHTS ISSUE OFFER ………………………………………………………………………………………………..7
6. THE RIGHTS ISSUE ………………………………………………………………………………………………………………………….10
7. DIRECTORS, AUDIT COMMITTEE AND OTHER PARTIES TO THE RIGHTS ISSUE …………..……………………11
8. CHAIRMAN’S LETTER ……………………………………………………………………………………………………………………..13
9. OVERVIEW OF RED STAR EXPRESS PLC …………………………………………………………………………………………..15
GROUP STRUCTURE............................................................................................................................... 15
BUSINESS OVERVIEW ............................................................................................................................ 15
SUBSIDARIES, AFFILIATES AND ASSOCIATED COMPANIES.................................................................... 15
BOARD OF DIRECTORS AND MANAGEMENT TEAM.............................................................................. 17
RISK FACTORS........................................................................................................................................ 20
10. SWORN LETTER OF DECLARATION OF FULL DISCLOSURE BY RED STAR EXPRESS PLC ………………………23
11. LETTER FROM THE DIRECTORS ON GOING CONCERN STATUS …………………………………………………………24
12. LETTER FROM THE AUDITORS ON GOING CONCERN STATUS ………………………………………………………….25
13. CONSOLIDATED FINANCIAL STATEMENTS ……………………………………………………………………………………….26
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ............................................................... 26
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ........................................................................ 27
CONSOLIDATED STATEMENT OF CASHFLOW........................................................................................ 28
14. STATUTORY AND GENERAL INFORMATION ……………………………………………………………………………………..29
INCORPORATION AND SHARE CAPITAL HISTORY.................................................................................. 29
SHAREHOLDING STRUCTURE ................................................................................................................ 29
DIRECTORS’ BENEFICIAL INTEREST........................................................................................................ 30
STATEMENT OF INDEBTEDNESS............................................................................................................ 30
OFF BALANCE SHEET ITEMS .................................................................................................................. 30
CLAIMS AND LITIGATIONS..................................................................................................................... 30
UNCLAIMED DIVIDENDS........................................................................................................................ 31
PURPOSE OF THE RIGHTS ISSUE............................................................................................................ 31
RELATED PARTY TRANSACTIONS........................................................................................................... 31
COST AND EXPENSES............................................................................................................................. 32
MATERIAL CONTRACTS ......................................................................................................................... 32
RELATIONSHIP BETWEEN THE COMPANY AND ITS ADVISERS .............................................................. 32
CONSENTS ............................................................................................................................................. 32
RESEARCH AND DEVELOPMENT............................................................................................................ 33
MERGERS AND ACQUISITIONS .............................................................................................................. 33
DECLARATIONS...................................................................................................................................... 33
OVERVIEW OF CORPORATE GOVERNANCE........................................................................................... 34
DOCUMENTS AVAILABLE FOR INSPECTION .......................................................................................... 36
15. PROVISIONAL ALLOMENT LETTER......................................................................................................... 37
16. RECEIVING AGENTS............................................................................................................................. 410
17. ACCEPTANCE/RENUNCIATION FORM ................................................................................................. 411
2
2. DEFINITION OF TERMS
The following definitions apply through this document except where otherwise stated:
ABBREVIATION NAME/DESCRIPTION
“AGM” Annual General Meeting
“ASI” All Share Index of the Nigerian Stock Exchange
“Board” The Board of Directors of Red Star Express PLC
Fees payable to Receiving Agents in respect of returns bearing
“Brokerage Commission” their stamps and duly allotted
“CAC” Corporate Affairs Commission
“CAMA” Companies and Allied Matters Act, CAP C20, Laws of the
Federation of Nigeria, 2004
“CBN” Central Bank of Nigeria
“Council”
“CSCS” Council of The Nigerian Stock Exchange
“Daily Official List”
Central Securities Clearing System PLC
“Directors”
Daily Official List of The Nigerian Stock Exchange
“FedEx”
“FGN” or “Government” The members of the Board of Directors of Red Star Express PLC
the “Group” who as at the date of this document are those persons whose
“GDP” names are set out on page 11 of this Rights Circular
“IFLN”
“ISA” Federal Express Europe Inc. & Co.
“ISO”
Federal Government of Nigeria
“Issue” or “Rights” or “Rights The Company and its subsidiaries
Issue” Gross Domestic Product
International Freight Logistic Network
“Issuing Houses” Investments and Securities Act No. 29 2007
International Standards Organization
“Issue Price” The Rights Issue by way of provisionally allotted rights of
“LFN” 336,855,291 ordinary shares of 50 Kobo each in the Company,
“Management” on the basis of four (4) for every seven (7) shares held by
“Naira” or “N” shareholders whose names appear on the Register of Members
“Nigeria” of the Company on the Qualification Date
FBNQuest Merchant Bank Limited and Meristem Capital
Limited
The price at which the shares under the Rights Issue will be
issued to existing Shareholders
Laws of the Federation of Nigeria 2004
Management of Red Star Express PLC
The Nigerian Naira, the official currency of Nigeria
The Federal Republic of Nigeria
3
2. DEFINITION OF TERMS
“NSE” or “Exchange” The Nigerian Stock Exchange
“Ordinary Shares” The Ordinary Shares of 50 kobo each held by the ordinary
shareholders of the Company
“Pari Passu”
“Professional Parties to the Equally
Issue”
The Issuing Houses, the Auditors, the Solicitors to the Issue, the
“Qualification Date” Joint Stockbrokers, the Registrars and the Receiving Bank
“Receiving Agents” 21 August, 2019
“Receiving Bank” Any of the institutions listed on page 40 of this Rights Circular to
“Red Star” or “Red Star Express” whom the Shareholders, listed on the share register of the
or the “Company” Company as at the Qualification Date, may return their duly
completed Acceptance/Renunciation Forms together with
“Register of Members” payment/evidence of payment
First Bank of Nigeria Limited
“Registrar”
“Rights Issue Shares” Red Star Express PLC
“Rights Circular” The register that records the names and addresses of the
Shareholders of the Company
“RSBF”
“RSBR” United Securities Limited
“RSFL” The shares being issued by Red Star Express PLC
“RSLL” This document, which is issued in accordance with the Rules and
“RSN” Regulations of the Commission in respect of this Rights Issue
“RSSSL” exercise
“SEC” or “the Commission” Red Star Burkina Faso
Red Star Benin Republic
“Shareholders” Red Star Freight Limited
Red Star Logistics Limited
“USD” or “$” Red Star Niger
“Working Day” or Red Star Support Services Limited
“Business Day” Securities and Exchange Commission
Shareholders of Red Star Express PLC as at the Qualification Date
(as defined in the Rights Circular)
United States Dollar
Any day other than a Saturday, Sunday or official public holiday
declared by the Federal Government of Nigeria from time to
time
4
3. CORPORATE DIRECTORY Admin Office:
1. Head Office: 42-43, Ewu Road
Aviation Estate, Mafoluku
70 International Airport Road Lagos State
Ikeja
Lagos State
Tel: +234 (1) 271 5670-6
Website: www.redstarplc.com
Email: [email protected]
2. Subsidiaries: OFFICE ADDRESS
ENTITY 70 International Airport Road
RED STAR LOGISTICS LIMITED Ikeja
Lagos State
RED STAR FREIGHT LIMITED 70 International Airport Road
Ikeja
RED STAR SUPPORT SERVICES LIMITED Lagos State
70 International Airport Road
3. Branch Offices: Ikeja
ENTITY Lagos State
RED STAR NIGER (BRANCH OFFICE)
OFFICE ADDRESS
RED STAR BENIN REPUBLIC (BRANCH OFFICE) 26, Avenue de l' O.U.A Niamey
RED STAR BURKINA FASO (BRANCH OFFICE) Niger BP 937,
Niamey Niger Republic
Lot 272 Parcelle G Bar Tito Cotonou,
Benin Republic
Avenue de la revolution, route de l’aéroport,
cité an II
01 BP 3892 Ouagadougou 01
5
4. ABRIDGED TIMETABLE
The dates indicated in the table below, which reflect principal events, are subject to change:
DATE ACTIVITY RESPONSIBILITY
11 November, 2019 Issue opens/Trading in Rights begins Issuing Houses
18 December, 2019 Issue closes/Trading in Rights closes Issuing Houses
07 January, 2019 Receiving Agents make returns Registrars / Issuing Houses
21 January, 2019 Forward allotment proposal and draft Issuing Houses
newspaper advertisement to SEC
27 January, 2019 Receive SEC clearance of allotment Issuing Houses
proposal
28 January, 2019 Disburse net proceeds of the Rights Receiving Bank/Issuing Houses
29 January, 2019 Issue to Red Star Express Issuing Houses
03 February, 2019 Issuing Houses/ Registrars
Publish allotment results in two
national daily newspapers
Return rejected/excess application
monies
03 February, 2019 Credit CSCS accounts Registrars
04 February, 2019 Forward Declaration of Compliance to Stockbrokers
the NSE
05 February, 2019 Listing of shares on the NSE Stockbrokers
06 February, 2019 Forward post completion report to the Issuing Houses
SEC
6
5. SUMMARY OF RIGHTS ISSUE OFFER
This summary draws attention to information contained elsewhere in this Rights Circular; it does not
contain all of the information you should consider before making an investment decision. You should
therefore read this summary together with the more detailed information, including the financial
statements elsewhere in this Rights Circular.
ISSUER Red Star Express PLC
Provisional allotment of 336,855,291 Ordinary Shares of 50 Kobo each on
THE ISSUE the basis of four (4) new Ordinary Shares for every existing seven (7)
Ordinary Shares held at N4.00 per share
LEAD ISSUING HOUSE FBNQuest Merchant Bank Limited
JOINT ISSUING HOUSE Meristem Capital Limited
AUTHORIZED SHARE
CAPITAL N500,000,000, comprising 1,000,000,000 Ordinary Shares of 50 kobo
ISSUED AND FULLY PAID each
BEING ISSUED
METHOD OF OFFER N294,748,380 comprising 589,496,760 Ordinary Shares of 50 Kobo each
GROSS ISSUE PROCEEDS 336,855,291 Ordinary Shares of 50 Kobo each at N4.00 per share
By way of a Rights Issue to Shareholders
N1,347,421,164
PURPOSE The proceeds of the Rights Issue will be used to finance the expansion of
USE OF PROCEEDS the Company’s current operations, the deployment of improved
technology and the improvement of its working capital
After the deduction of estimated issue costs and expenses of
[N37,484,886] (representing 2.78% of the gross issue proceeds), the net
issue proceeds of N1,309,936,278 will be applied as follows:
UTILISATION CAPITAL TO BE (%) EXPECTED
RAISED
Developing warehouse facilities @ COMPLETION PERIOD
Lagos- Ibadan Expressway and Murtala (N’ 000)
Muhammed 1 Airport Cargo Terminal 54 18 months
704,000
Purchase of Trucks 201,648 15 3 months
Group ICT Improvement / Enterprise 154,288 12 18 months
Resource Planning Solution
Working Capital 250,000 19 Immediate
Total 1,309,936 100
A more detailed description on the use of proceeds is provided on page
31.
7
5. SUMMARY OF RIGHTS ISSUE OFFER
PROVISIONAL ALLOTMENT Four (4) new Ordinary Shares for every seven (7) Ordinary Shares of 50
kobo each held as at the close of business on the Qualification Date for
ISSUE PRICE those shareholders whose names appear on the Register of Members
PAYMENT and transfer books of the Company.
N4.00 per share
STATUS In full on acceptance
All the shares to be issued shall rank pari-passu in all respects with the
MARKET CAPITALIZATION AT issued Ordinary Shares of the Company.
RIGHTS ISSUE PRICE
(PRE-ISSUE) N2,357,987,040.00
MARKET CAPITALIZATION AT
RIGHTS ISSUE PRICE N3,705,408,204.00 (assuming all provisionally allotted ordinary shares
(POST-ISSUE) are fully taken up on completion of the Rights Issue).
OPENING DATE Monday, 11 November 2019
CLOSING DATE Wednesday, 18 December 2019
QUALIFICATION DATE 21 August, 2019
APPLICATION FOR Ordinary Shares that are not taken up by 18 December, 2019 will be
ADDITIONAL SHARES allotted on a pro-rata (equal) basis to Shareholders who applied and paid
for additional shares over and above their provisional allotment.
Accordingly, the Shareholders who do not accept their allotment in full
may have their shareholding in the Company diluted.
UNDERWRITING At the instance of the Issuer, the Issue is not underwritten.
Financial Summary Unaudited March, March, March, March,
(Group) 6 Months 2018 2017 2016 2015
March, 2019
FINANCIAL SUMMARY (GROUP) Turnover Sept. 30, 2018 N‘m N‘m N‘m N‘m
Profit before taxation 8,408 7,299 6,633 6,658
Profit after taxation N‘m
Share Capital 610 653 572 611
Net Assets 10,067 348 427 334 384
Total Assets 295 295 295 295
743 2,528 2,432 2,212 2,061
4,993 4,432 3,756 3,820
466
295
2,763
5,548
Earnings per share (k) 79 59 72 57 65
QUOTATION Red Star’s entire issued and paid-up share capital is listed on the NSE. An
application has been made to the Council of the Exchange for the
admission of the 336,855,291 shares to its Daily Official List.
8
5. SUMMARY OF RIGHTS ISSUE OFFER
STATUS The shares being issued will rank pari passu in all respects with the existing
DIVIDEND QUALIFICATION issued Ordinary Shares of the Company.
INDEBTEDNESS
The Rights Issue Shares shall qualify for any dividend (or any other
CLAIMS AND LITIGATION: distribution) declared for the financial year ending March 2020, as long as
the qualification date for the dividend (or any other distribution) declared
SETTLEMENT: is after the allotment of the Ordinary Shares now being issued.
TRADING IN RIGHTS:
As at 31 March 2019, Red Star Express PLC had a finance lease obligation
amounting to ₦124,317,000 (One Hundred and Twenty-Four Million,
Three Hundred and Seventeen Thousand Naira).
As at the date of this Rights Circular, Red Star Express PLC in its ordinary
course of business is currently involved in fifteen (15) pending cases,
fourteen (14) of which were instituted against the Company, and one (1)
by the Company. The details of the total amounts claimed in the cases
instituted by and against the Company can be found on page 30 of this
Rights Circular. Based on the review of 15 cases for and against the
Company, the Solicitors are of the opinion that the claims and litigations
are not likely to have any material adverse effect on the Company and/or
the Right Issue and are not aware of any pending or threatened claims or
litigation involving the Company other than those disclosed above.
The CSCS accounts of Shareholders will be credited immediately from the
date of allotment clearance by the SEC. Shareholders are hereby advised
to state the names of their respective stockbrokers and their Clearing
House Numbers in the relevant spaces on the Acceptance/Renunciation
Form.
The Rights are tradable on the Exchange between 11 November, 2019
and 18 December, 2019.
9
6. THE RIGHTS ISSUE
Copies of this Rights Circular and the documents specified herein have been delivered to the Securities and Exchange Commission for clearance
and registration.
This Rights Circular is being issued in compliance with the provisions of the Investments and Securities Act No. 29 2007 and the Rules and
Regulations of the Commission and the Listing Requirements of the NSE and contains particulars in compliance with the requirements of the
Commission and the Exchange, for the purpose of giving information to Shareholders and the public with regards to the Rights Issue of
336,855,291 Ordinary Shares of 50 kobo each in Red Star Express PLC by the Issuing Houses. An application has been made to the Council of The
NSE for the admission to its Daily Official Lists of the 336,855,291 Ordinary Shares of 50 kobo each being issued via the Rights Issue.
The Directors of Red Star Express PLC individually and collectively accept full responsibility for the accuracy of the information contained in this
Rights Circular. The Directors have taken reasonable care to ensure that the facts contained herein are true and accurate in all respects and
confirm, having made all reasonable enquiries that to the best of their knowledge, information and belief, there are no material facts, the omission
of which would make any statement herein misleading or untrue.
The shares to be issued by the Company pursuant to the Rights Issue will rank pari passu in all respects with the existing issued Ordinary Shares
of the Company.
FBNQUEST MERCHANT BANK LIMITED
RC: 264978
MERISTEM CAPITAL LIMITED
RC: 1297664
on behalf of
RED STAR EXPRESS PLC
RC: 200203
are authorized to receive acceptances for the
RIGHTS ISSUE OF
336,855,291 ORDINARY SHARES OF 50 KOBO EACH
AT N=4.00 PER SHARE
on the basis of four (4) new Ordinary Shares for every seven (7) Ordinary Shares held as at 21 August,
2019
Payable in full on Acceptance
The Acceptance List for the shares now being issued will open on Monday, 11 November 2019 and close
on Wednesday, 18 December 2019
Share capital and Reserves of the Company as at 31 March 2019 N’000
(Extracts from the 31 March 2019 Financial Statements)
Authorized Share Capital: 1,000,000,000 Ordinary Shares of 50 kobo each 500,000
Issued and fully Paid: 589,496,760 Ordinary Shares of 50 kobo each 294,748
EQUITY AND RESERVES 294,748
Ordinary Share Capital 296,433
Share Premium 2,171,742
Retained earnings 2,762,923
TOTAL EQUITY (ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY)
10
7. DIRECTORS, AUDIT COMMITTEE AND OTHER PARTIES TO THE RIGHTS ISSUE
DIRECTORS, AUDIT COMMITTEE & THE COMPANY SECRETARY
Mr. Suleiman Barau Red Star Express PLC
Chairman 70 International Airport Road, Ikeja
Lagos
Mr. Obabori Peter Olusola Red Star Express PLC
Group Managing Director/CEO 70 International Airport Road, Ikeja
Lagos
Mr. Babura Auwalu Badamasi Red Star Express PLC
Executive Director Finance & Administration 70 International Airport Road, Ikeja
Lagos
Mr. Ukwat Enobong Victor Red Star Express PLC
Executive Director Sales & Marketing 70 International Airport Road, Ikeja
Lagos
Mrs. Chioma Sideso Red Star Express PLC
Non-Executive Director/ Audit Committee 70 International Airport Road, Ikeja
Member Lagos
Alhaji Aminu Dangana Red Star Express PLC
Non-Executive Director 70 International Airport Road, Ikeja
Lagos
Mr. Sulaiman Lawan Koguna Red Star Express PLC
Non-Executive Director/ Audit Committee 70 International Airport Road, Ikeja
Member Lagos
Mr. Sule Umar Bichi Red Star Express PLC
Non-Executive Director/ Audit Committee 70 International Airport Road, Ikeja
Member Lagos
Mrs. Frances Ndidi Akpomuka Red Star Express PLC
Company Secretary 70 International Airport Road, Ikeja
Lagos
Chief Cyril I. Ugwumadu Red Star Express PLC
Independent Shareholder/ Audit Committee 70 International Airport Road, Ikeja
Member Lagos
Mr. Kolawole Ganiyu Amoo Red Star Express PLC
Independent Shareholder/ Audit Committee 70 International Airport Road, Ikeja
Member Lagos
Mr. Moses Ayodele Ogundeji Red Star Express PLC
Independent shareholder/ Chairman of the 70 International Airport Road, Ikeja
Audit Committee Lagos
11
7. DIRECTORS, AUDIT COMMITTEE AND OTHER PARTIES TO THE RIGHTS ISSUE
PROFESSIONAL PARTIES TO THE RIGHTS ISSUE FBNQuest Merchant Bank Limited
LEAD ISSUING HOUSE 10 Keffi Street,
JOINT ISSUING HOUSE Off Awolowo Road, Ikoyi,
REGISTRARS Lagos
SOLICITORS TO THE ISSUE Meristem Capital Limited
STOCKBROKERS TO THE ISSUE 124 Norman Williams Street, Ikoyi,
Lagos
AUDITORS United Securities Limited
RECEIVING BANK Plot 009 Amodu Ojikutu Street, Victoria Island,
Lagos
Tokunbo Orimobi LP
1963B Buraimoh Kenku Street,
Off Oyin Jolayemi Street, Victoria Island,
Lagos
APT Securities & Funds Limited
29 Marina Street, Marina,
Lagos
Cordros Securities Limited
70 Norman Williams, Ikoyi,
Lagos
FCSL Asset Management Limited
13 Ribadu Road, Ikoyi,
Lagos
Mega Equities Limited
4AA Force Road
By Race Course, Onikan,
Lagos
PAC Securities Limited
Plot 8A Elsie Femi Pearse Street, Victoria Island,
Lagos
APEL Asset Limited
8 Alhaji Bashorun Street, Ikoyi
Lagos
Ernst & Young
UBA House
57 Marina Road,
Lagos Island,
Lagos
First Bank of Nigeria Limited
Samuel Asabia House
35 Marina Road,
Lagos Island,
Lagos
12
8. CHAIRMAN’S LETTER
The following is the text of a letter received by the Issuing Houses from Mr. Suleiman Barau, Chairman,
Board of Directors of Red Star Express PLC.
18 July, 2019
RED STAR EXPRESS PLC
70 International Airport Road
Ikeja
Lagos
TO: ALL SHAREHOLDERS OF RED STAR EXPRESS PLC
Dear Sir/Madam,
RIGHTS ISSUE OF 336,855,291 ORDINARY SHARES OF N0.50 KOBO EACH AT ₦4.00 PER SHARE IN RED
STAR EXPRESS PLC
INTRODUCTION
I am pleased to inform you that the Board of Directors of Red Star Express PLC have resolved to issue by
way of Rights, 336,855,291 Ordinary Shares of 50 kobo each to the Shareholders whose names appear on
the Company’s Register of Members as at 21 August 2019 on the basis of four (4) new ordinary shares for
every seven (7) ordinary shares held.
The purpose of the Rights Issue is to enable the Company expand its current operations, implement new
growth opportunities already identified and optimize its use of technology. By supporting the Rights Issue
through acceptance of your Rights, the Board will be able to implement the initiatives that will enhance
the Company’s ability to achieve sustainable growth and value creation for all Shareholders.
USE OF PROCEEDS
The Company will apply the net proceeds of the Rights Issue to expand its current operations by
developing two (2) warehouses, purchase trucks, improving its use of technology and fund working
capital.
ECONOMIC AND OPERATING ENVIRONMENT
The Nigerian Economy has faltered due to a prolonged slide in the oil price that began in August 2014 and
only started abating in late 2017. In line with Nigeria’s over dependence on oil exports, the Nigeria
economy entered into a recession in 2016. Hence, the real GDP contracted by 1.6% in the period but
recorded a modest growth of 0.8% in 2017 and 1.9% in 2018.
13
8. CHAIRMAN’S LETTER
The slowdown in the pace of the economy has been particularly evident in the non-oil sector. According
to the Nigerian Bureau of Statistics (NBS), non-oil GDP enjoyed an average annual growth of 2.02%
between 2015 and 2016 but has seen that growth reduce to an average of 1.21% from 2017 to 2018.
However, the Agriculture sector has enjoyed a fairly healthy growth in recent times, recording a growth
of 3.45% in 2017 and 2.12% in 2018. This has been in response to various government efforts at boosting
the agriculture sector for both self-sustenance and export purposes.
The International Monetary Fund (“IMF”) has projected an annual average GDP growth of 2.5% for Nigeria
between 2019 and 2024. It also projected a growth of 2.1% in Nigeria’s GDP in 2019. The growth is
expected to be recorded on the back of sustained increase in oil prices, recovery in oil production and
improved availability of foreign currency on the back of policies introduced by CBN in 2017. We are
confident that these growth projections can be achieved in account of the following:
the foreign exchange policies introduced by the CBN has helped to stabilize the foreign currency
markets, boost confidence and improved flows;
the national elections of Q1 2019 were generally successful and were without any major incidents
thereby leading to peaceful continuity in governance;
expected stability in monetary policy on the back of the renewal of the tenure of the Governor of
the CBN; and
the gradual decline in inflation and headline interest rates may result in a boost in corporate
borrowing and bank lending and thereby an increase in economic activities.
The ability of the Government to set a policy direction and continually drive its economic growth agenda
while tackling security, unemployment and infrastructure challenges will go a long way in enabling Nigeria
to achieve and surpass its growth expectations in the coming years.
CONCLUSION
By accepting your Rights, you will be reinforcing your support for Red Star to explore new opportunities
required to enhance the Company’s ability to achieve sustainable growth and value creation for all
Shareholders.
This Rights Circular contains an Allotment Letter on page 37, detailing full instructions for acceptance,
payment and renunciation of your Rights.
Yours faithfully,
Suleiman Barau
Chairman, Board of Red Star Express PLC
14
9. OVERVIEW OF RED STAR EXPRESS PLC
GROUP STRUCTURE
100% 100% 100%
BUSINESS OVERVIEW
Red Star, together with its subsidiaries, engages in the provision of courier, mail room management,
freight, logistics, warehousing, and general haulage services in Nigeria. The Company operates
through four divisions namely: Courier Service, Freight Services, Logistics, and Support Services. The
Company was incorporated as a Private Limited Liability Company on 10 July 1992 and commenced
business on 12 October 1992. The Red Star network consist of the following:
more than 150 offices across Nigeria;
coverage of more than 1,500 communities;
a fleet of approximately 700 vehicles under management; and
over 1700 staff.
The Company maintains adequate working capital levels. Following this rights issue, Red Star would
buffer its working capital to support growth initiatives and consolidate its market position. In order to
remain competitive, Red Star ensures all its personnel are adequately trained and developed.
SUBSIDARIES, AFFLIATES AND ASSOCIATED COMPANIES
Red Star Express PLC has the following subsidiaries:
Red Star Logistics Limited (“RSLL”)
Red Star Logistics Limited began operations in March 2008 and it specializes in ground haulage delivery
services, using trucks and vans. Red Star Logistics Limited’s services also include domestic haulage of
heavyweights, consolidation of trucking cargo, ancillary services, and warehousing services. Red Star
Logistics is a dependable partner that relieves customers from the burdens of complex day-to-day
logistics challenges and provides a cost-effective tailor-made solution for supply chain. RSLL’s end to
end supply chain and logistics solutions efficiently manages the transfer of products, information and
funds between suppliers and customers allowing its customers to focus on reaching the full potential
of their business.
15
9. OVERVIEW OF RED STAR EXPRESS PLC
Red Star Freight Limited (“RSFL”)
Red Star Freight Limited commenced operations in November 2008 with competencies in air and sea
freight of bulk cargo, heavy weight consignments, packing and removal of personal effects, import and
export, container handling, clearing and forwarding of cargo/ (sea and air), and door–to-door service/
(sea and air), to and from various local and international offices/depots of our clients. Red Star Freight
is a member of International Freight Logistic Network (IFLN) which grants it access to over 160
countries as well as the expertise of over 180,000 Professionals.
Red Star Support Services Limited (“RSSSL”)
Red Star Support Services Limited is the outsourcing arm of Red Star Express PLC, providing human
capital and facilities for the banking, oil & gas and the multi-national institutions. The premier product
of RSSSL is mailroom management, which includes provision of dedicated staff and resources to the
day-to-day running of the mail dispatch operations of its clients. Other areas of coverage include
archive management and vehicle pool management services.
FEDERAL EXPRESS EUROPE INCORPORATION AND COMPANY (“FEDEX”) - AFFILIATE
Red Star Express is the sole licensee of FedEx in Nigeria. FEDEX is an American multinational courier
delivery service company headquartered in Memphis, it was founded in 1989. The company's line of
business includes providing air delivery of individually addressed letters, parcels, and packages.
RED STAR NIGER (“RSN”) – BRANCH OFFICE
Red Star Express opened a branch office in Niger Republic and it became operational on March 1 2017.
RSN provides global logistics solutions to solve shipping challenges and connect with customers in new
markets. It is also the appointed licensee of FedEx in Niger Republic.
RED STAR BENIN REPUBLIC (“RSBR”) – BRANCH OFFICE
RSBR is the appointed licensee of FedEx and TNT in Benin Republic and it handles all their inbound and
outbound package deliveries within the country.
RED STAR EXPRESS BURKINA FASO (“RSBF”) – BRANCH OFFICE
RSBF is the appointed licensee of FedEx and TNT in Burkina Faso and it handles all their inbound and
outbound package deliveries within the country.
In addition to the subsidiaries, associated companies and branches mentioned above, three (3)
divisions at the Company are utilized to pursue various opportunities. They include:
RSE Print and Packaging: This division is tasked with the production of packaging materials for parcels
as well as the production of branding items such as signage, flyers, banners etc.
Red Star Agro-trade Services: This division provides logistic solutions for the Agriculture industry. This
involves the management of farm produce from the farm to both the domestic and international
markets.
16
9. OVERVIEW OF RED STAR EXPRESS PLC
RS Allied Solutions: This division focuses on developing technology-driven solutions for clients. Such
solutions include E-archiving, E-commerce and Cloud computing.
The various subsidiaries and division are strategically positioned to support growth initiatives and
consolidate Red Star’s position in its various businesses.
BOARD OF DIRECTORS AND MANAGEMENT TEAM
i. Mr. Suleiman Barau (OON, FCIB, FNIM), Chairman
He was a distinguished public servant, and a banker with significant experience in commercial
banking, merchant banking and central banking. He has spent over 18 years as a public servant
working initially as a Principal Economist with the Nigerian Mining Corporation and subsequently
with the Central Bank of Nigeria as a Special Adviser to the Governor during which time he briefly
acted as Managing Director of the Nigerian Security Printing and Minting PLC. He was also a two-
term Deputy Governor of CBN before he retired in December 2017. Prior to working at the CBN, he
had over 17 years banking experience cutting across four banks namely Continental (formerly Chase)
Merchant Bank, Bank of the North, UBA and FSB International Bank.
Mr. Barau acquired his B.Sc. degree in Economics from the Ahmadu Bello University, Zaria (1981).
He also holds MSc. degrees in Investment Analysis from the University of Jos (1988) and in
Management Research from University of Bradford (2010) respectively. He has attended over 3
dozen courses in major institutions such as Euromoney, INSEAD, IMD, Wharton, Harvard, Kellogg
and Stanford Universities. He is an Alumnus of Harvard Kennedy and IMD Business Schools. He loves
soccer, car racing, railways and geography.
ii. Mr. Olusola Peter Obabori, Managing Director/CEO
He is the Group Managing Director/Chief Executive Officer of Red Star Express PLC. He is an astute
management professional with an accounting and finance background and a long and outstanding
career in Sales and Marketing. He has traversed different spheres in the industry, making landmark
contributions in the areas of customer service and business development, logistics, warehousing
and freight.
He was previously the General Manager/Chief Operating Officer of Red Star Logistics Limited, a
wholly-owned subsidiary of Red Star Express PLC. He joined the services of the organization in 1999.
At various times, he served as the group's Assistant General Manager in charge of Strategy and
Business Development for over five years and later as Deputy General Manager Sales with
responsibility for the national sales management.
Mr. Obabori holds a Bachelor of Science in Accounting (1993), a Master of Business Administration
(1998), a Master of Philosophy in Business Administration (2013) and a Doctor of Philosophy (2018)
in Business Administration, all from Obafemi Awolowo University, Ile-Ife, Nigeria. He is an alumnus
of several advanced management and leadership programmes from world-class institutions
including -The School of Business Leadership of the University of South Africa, McGill Executive
Institute, Canada; Lagos Business School, Nigeria; Harvard Business School, USA; Haas Business
School of the University of California, Berkeley, USA; The University of Westminster, United Kingdom
and FedEx Purple Academy, Belgium where he excelled as the Purple Star Award Winner in 2006.
17
9. OVERVIEW OF RED STAR EXPRESS PLC
He is a member of the 2016 FedEx GSP 3 Class, Memphis, USA; a Fellow of the National Institute of
Marketing of Nigeria, a Fellow of the Institute of Business Development, a Fellow of The courier and
Logistics Management Institute and a Member of the Institute of Directors (M.IoD) of Nigeria.
iii. Mr. Auwalu Badamasi Babura, Executive Director, Finance & Administration
He was formerly the Head of Internal Audit and Quality Assurance at Red Star Express PLC. He is a
highly motivated and result oriented financial expert with over 20 years of invaluable experience in
numerous financial and accounting fields, including: financial analysis and forecast, budget
preparation and implementation as well as monitoring key controls of processes.
Mr. Babura holds a first Degree in Accounting from Bayero University Kano (1992) and an MBA in
Business Administration (MBA) from the Lagos State University (2012). He joined Red Star Express
in 1994, and has served in various capacities including as Head of Internal Control and Processes,
Head of Treasury and Accounts, Group Accountant, Group Treasurer, Credit Controller among
others. He has attended various training programs cutting across Controls, Planning, and Risk &
Leadership amongst others both locally and abroad.
He is an Alumnus of the Lagos Business School, Senior Management Program and also an Associate
of the Institute of Chartered Accountants of Nigeria.
iv. Mr. Ukwat Enobong Victor, Executive Director, Sales & Marketing
A resourceful professional with strong expertise in revenue expansion and cost reduction through
building of a competitive corporate brand. He is passionate about excellent service delivery, building
and motivating dynamic teams and creating revenue opportunities.
Mr. Ukwat joined Red Star Express in 1997 and has over the years worked in various capacities. He
has previously led teams in Business Development, Key Accounts, National Sales, Operations,
Marketing and Corporate Communication. He holds a Bachelor's degree in Science (B.Sc.) from the
University of Calabar, M.Sc. from the University of Ibadan and an MBA in Business Administration
from the Lagos Business School.
He is an alumnus of Senior Entrepreneurship, Management and Leadership Programmes from some
Global institutions, including FedEx Purple Academy Brussels, IESE Business School (Spain), Harvard
Business School (USA), Columbia Business School New York , University of Wisconsin (USA) and most
recently, Schulich Business School, Toronto Canada.
v. Mrs. Chioma Sideso, Non-Executive Director
She is a proven visionary and strategic business leader. She holds an LL.B from the University of Kent,
Canterbury, a Professional Diploma in Marketing from the Chartered Institute of Marketing UK and
is an Associate of The Chartered Insurance Institute UK. She commenced her professional career
with Marks and Spencer PLC UK between Jan 1999 – Jan 2001, and worked briefly with Jardine Lloyd
Thompson Group UK Jan 2001 to April 2002, before moving to Barclay’s Bank UK April 2002 to
November 2003. She has attended various local and international trainings.
Mrs. Sideso assumed the position of President ADIC Insurance Limited in November 2006 and was
subsequently appointed the Managing Director of NSIA Insurance Limited in 2014, where she played
a major role in creating and reinforcing a culture of excellence within the organization in order to
interface successfully with the African subsidiaries.
18
9. OVERVIEW OF RED STAR EXPRESS PLC
vi. Alhaji Aminu Dangana, Non-Executive Director
He is a professional management consultant and financial adviser. He graduated with a degree in
Business Administration from Ahmadu Bello University and a Masters in Business Administration
(MBA) from Bayero University, Kano.
Alhaji Dangana began his career in the banking industry, where he rose to the position of a branch
manager, before leaving in 1987 for an academic life. He joined Kano State Polytechnic as Senior
Lecturer and held the positions of Head of Department, Banking and Finance, and Chief
Examinations Officer, from December, 1988 to September, 1990.
From 1990 to date, he served at various capacities at several private and public institutions. He is a
Fellow of Chartered Institute of Stockbrokers; Member, Nigerian Institute of Management;
Member, Nigerian Economic Society; Member, Institute of Investment Management & Research;
and Member, Commodity Brokers Association of Nigeria among others and has served in various
capacities within private and public sectors.
vii. Mr. Sulaiman Lawan Koguna, Non-Executive Director
He is a graduate of Economics from the Eastern Mediterranean University, Cyprus and holds a Post
Graduate Diploma in Finance and Management from Loughborough University, Leicestershire, UK.
He is an experienced Insurance professional and a member of the Chartered Insurance Institute UK.
Mr. Koguna was Council member of the Standards Organization of Nigeria (SON) and is the Executive
Director Marketing, Koguna Babura Insurance Brokers Limited. He is also Founder/Director e-
Insurance Solutions Centre Limited, e-Training Institute and e-Island Solutions Limited.
viii. Mr. Sule Umar Bichi, Non-Executive Director
He is a graduate of Accounting from Bayero University, Kano (1986). He also holds a Master’s Degree
(M.Sc.) in Economics from the Lagos State University and is an Alumnus of Lagos Business School.
He is a Fellow of the Institute of Chartered Accountants of Nigeria (FCA) and Institute of Directors of
Nigeria (FIoD).
Prior to his appointment as Non-Executive Director, he was Managing Director/CEO of Red Star
Express PLC for 9 years, until expiration of his contract in August 2016. Mr. Bichi is currently
Managing Director of Madinka Ventures Limited and Chairman Audit and Risk Committee of the
Institute of Directors of Nigeria (IOD).
ix. Mrs. Frances Ndidi Akpomuka, Company Secretary and Head, HR, Learning and Development
She graduated with an LL.B. from the University of Nigeria (Nsukka) in 1998 and was called to the
Nigerian Bar in 2000. She began her professional career as an Associate with the Law Firm of Yemi
Peters & Associates, where she garnered experience in Litigation, Legal Drafting, Negotiation,
Mediation and Conciliation, as well as Corporate and Commercial Law Practice.
Prior to joining Red Star Express in 2006 as Legal Adviser and subsequent appointment as Company
Secretary in 2007, she was Legal Officer with Assurance Bank Nigeria Limited for three (3) years. She
attended various training programs on Banking Operations, Fraud and Forgeries, Corporate
Governance, Company Direction and Board Effectiveness amongst others. She is a Member of the
Nigerian Bar Association as well as an Associate of the Chartered Institute of Secretaries and
Administrators of Nigeria.
19
9. OVERVIEW OF RED STAR EXPRESS PLC
RISK FACTORS
Accepting Shareholders should consider all of the information in this Rights Circular, including the
following risk factors, before deciding to accept delivery of the new shares. If the risks described below
materialise, the Company's business, results of operations, financial condition and/or future prospects
could be materially adversely affected, which could cause the value and trading price of its ordinary
shares to decline, resulting in a loss of all or part of any investment in the ordinary shares of Red Star.
The following risk factors do not purport to be an exhaustive list or explanation of all the risk factors
involved in investing in Red Star and they are not set out in any order of priority. In particular, the
Company’s performance might be affected by changes in market and economic conditions and in legal,
regulatory or tax requirements. If such changes were to occur, the price of the shares may decline and
investors could lose all or part of their investment. Additionally, there may be further risks of which the
Company is not aware or believes to be immaterial which may, in the future, adversely affect the
Company’s business and the market price of the shares.
Investment in the shares will involve risks. The shares may not be suitable for all recipients or be
appropriate for their personal circumstances. You should carefully consider in light of your financial
resources whether investing in Red Star is suitable for you. An investment in the shares is only suitable
for financially sophisticated investors who are capable of evaluating the merits and risks of such an
investment and who have sufficient resources to be able to bear any losses which may arise (which
may be equal to the whole amount invested).
COUNTRY RISKS
Socio-Political Risk
With the relatively peaceful general elections in the first quarter of 2019, and the governing party
retaining the presidency, we do not expect material changes in government policies. Rising civil unrest
across the country together with the continued attacks by Boko Haram significantly increases
insecurity. Unfortunately, insecurity is antithetical to a conducive business environment which is
required for the unhindered operations of Red Star.
Macroeconomic Risk
Having exited a recession in 2017, the Nigerian economy has struggled to accelerate its growth
significantly above the population growth rate of c.2%. While the exchange rate has remained
relatively stable between 2016 and 2019, inflation continues to wobble around 11% and the apex bank
determined Monetary Policy Rate had remained largely flat. The weak macroeconomic indices together
with unfavorable macroeconomic environment is unfavorable to the growth of businesses.
Legal and Regulatory Risk
Companies are exposed to litigations from clients due to negligence and factors outside their control.
For a logistic company, litigation arise from failure to do any of the following; provide accurate shipping
documentation, deliver cargoes as scheduled, prevent cargo damage, ensure confidentiality of mails
and various operational challenges. Also, changes in laws, rules, policies and tax regulations also pose
a threat to Red Star. Considering Red Star’s operations are cross-border, it is also indirectly exposed to
changes in international policies and regulations.
20
9. OVERVIEW OF RED STAR EXPRESS PLC
BUSINESS RISKS
Credit Risk
This is the risk of financial loss to the Group if a customer or counterparty fails to meet its contractual
obligations. Red Star may also exposed to credit risk from credit sales.
Liquidity Risk
This is the risk arising from the Company’s management of working capital. It is the risk that a company
might encounter difficulty in meeting its financial obligations as they fall due.
Operational Risks
Operational risks includes loss of profits or business interruptions from internal and external risk factors
such as failure of people and processes, failure of internal controls and systems, inefficiencies in
infrastructure, inventory mismanagement, human errors and cross-border inefficiencies. Problems on
cross-border operations, particularly with regard to law enforcement and corruption pose a significant
threat on the profitability of logistics companies.
People Risk
This risk has to do with employees and the ability of a company to retain its employees. It also involves
fraudulent and unethical practices by employees which poses threats to a business. Businesses lose a
significant portion of their revenues each year due to insider fraud and unethical practices, which
impact service delivery and profitability of the business. Red Star’s business model is largely
operational, therefore the company’s ability to function efficiently and profitably is heavily dependent
on its ability to attract and retain upright human capital.
Internal Control Risk
This risk may be heightened due to a breakdown of internal controls, processes and procedures leading
to loss of business, fraud and/or loss of assets. However, a good internal audit system is required for
operational excellence and the pursuit of new strategies for long time sustenance of the business.
Technology Risk
The increasing digitalization and automation of the transport and logistics sector has made the industry
a target for cyber-crime. The impact of cyber-attack like unauthorized use of the freight forwarder’s
logistic planning system and misuse of the goods tracking system pose enormous financial
consequences for clients as well as for the Company. In addition, failure of technology can significantly
disrupt day-to-day business activities.
Competition Risk
The Nigerian logistics industry is evolving quickly with technology firms playing an active role. As a
result, competition and pricing pressures is now intense with the possibility of adversely affecting Red
Star’s ability to gain or maintain market share and/ or profitability. Profitability will be impacted if the
Company is unable to increase freight prices in response to rising input costs and other factors, while
still maintaining its competitive advantage. Furthermore, given that the logistics industry is a cyclical
industry, during periods of economic decline and uncertainty, the industry also tend to behave in the
same manner and vice versa.
21
9. OVERVIEW OF RED STAR EXPRESS PLC
OTHER RISKS
Environmental Risk
These are losses that arise as a result of natural occurrences such as floods, fire, pollution,
environmental degradation and other natural hazards. They typically have a negative impact on a
company’s operations and may affect the sustainable operations and profitability of a business.
Insurance Risk
This is the likelihood that an insured event will occur, thus requiring the insurer to pay a claim.
Consequently, when an insured event occurs, Red Star may have to depend on its insurance company
to receive compensation for damages incurred.
22
10. SWORN DECLARATION OF FULL DISCLOSURE BY RED STAR EXPRESS PLC
23
11. LETTER FROM THE DIRECTORS ON GOING CONCERN STATUS
24
12. LETTER FROM THE AUDITORS ON GOING CONCERN STATUS
25
13. CONSOLIDATED FINANCIAL INFORMATION
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
RED STAR EXPRESS PLC
March The Group March March March
2019 March 2017 2016 2015
N ‘000 2018 N ‘000 N ‘000 N ‘000
N ‘000 7,298,642 6,632,996 6,658,468
( 5,111,140) ( 4,674,470) ( 4,720,300)
Revenue 10,066,576 8,407,507 2,187,502 1,958,526 1,938,168
Cost of Sales ( 7,290,061) ( 5,625,188) ( 1,581,340) ( 1,399,250) ( 1,364,181)
GROSS PROFIT 2,776,515 2,782,319 50,464 16,204 41,207
Administrative expenses ( 2,131,331) ( 2,178,476) 656,626 575,480 615,194
Other operating income 119,397 11,088 17,684 7,415 13,205
( 21,110) ( 10,788) ( 17,337)
Total operating profit 764,581 614,931 653,200 572,107 611,062
( 226,444) ( 237,680) ( 227,425)
Finance income 12,794 23,318 426,756 334,427 383,637
Finance cost ( 33,906) ( 27,660)
( 91) - -
PROFIT BEFORE TAXATION 743,469 610,589 91 -
TAXATION ( 277,221) ( 263,031) - - -
PROFIT AFTER TAXATION 466,248 347,558 610 32,899 -
Other comprehensive income/ (loss) to be ( 183) ( 9,870)
reclassified to profit or loss -- 23,029 -
Fair value loss on available for sale instrument -- 427 357,456 20,756
Reclassification adjustments for loss included in -- 427,183 334,427
profit or loss 426,756 357,456 6,227
Other comprehensive income/ (loss) to be 54,852 ( 23,172) 427,183 -
reclassified to profit or loss ( 16,456) 6,952 0.57
Other comprehensive income not to be reclassified 0.72 14,529
to profit or loss in subsequent periods: 38,396 ( 16,220) 369,108
504,644 331,338 383,637
Re-measurement (loss)/gain on defined benefit plan 466,248 347,558
504,644 331,338 369,108
Tax effect
Other comprehensive income for the year, net of 0.79 0.59 0.65
tax
Total comprehensive income for the year, net of
tax
Profit attributable to ordinary equity holders
Total comprehensive income for the year
attributable to ordinary equity holders
Earnings per share (kobo):
Basic and diluted earnings per share
Source: Company’s Annual Financial Statements (2015-2019)
26
13. CONSOLIDATED FINANCIAL INFORMATION
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
RED STAR EXPRESS PLC
The Group
March March March March March
2017 2016 2015
2019 2018 N ‘000 N ‘000 N ‘000
N ‘000 N ‘000 1,150,232 882,393 1,021,216
18,172 5,359 11,154
ASSETS 1,388,952 1,259,512 22,968 16,153
Non-current assets 47,508 32,668 477 14,736 601
Property, plant & equipment 90,149 32,456 - 568 -
- 477 - - -
Intangible assets - - -
- 1,191,849 1,049,124
Prepayments 535 903,056
1,527,144 1,325,113 47,356 52,218
Available for sale financial instrument 2,520,269 61,179 1,983,559
Investment in subsidiary 50,901 52,956 2,083,023
Equity Instrument at fair value through other comprehensive 3,354,230 2,930,854 158,422 57,843
income 513,661 73,799 675,398
Total non-current assets 93,422 135,204 3,239,708 635,134 2,769,018
Current assets 522,334 549,868 4,431,557 2,853,135 3,818,142
Inventories 4,020,887 3,668,882 3,756,191
5,548,031 4,993,995 294,748 294,748
Trade and other receivables 296,433 294,748 296,433
294,748 294,748 1,840,867 296,433 1,469,730
Current prepayments 2,432,048 1,620,862 2,060,911
296,433 296,433 2,212,043
Cash and cash equivalents 49,176 26,075
Total current assets 2,171,742 1,936,404 150,623 24,781 132,139
TOTAL ASSETS 2,762,923 2,527,585 48,903 109,174
248,702 30,322
EQUITY AND LIABILITIES 46,336 78,473 - 188,536
Equity: 172,274 181,313 1,526,286 133,955
Share capital 33,925 18,077 1,293,282
252,535 76,832 206,444 1,122,985 33,436
Share premium 336,618 30,322
2,151,422 1,750,807 241,977
Retained earnings 90,392 1,808,983 1,999,509 256,886 1,568,695
Total equity 290,759 70,580 4,431,557 1,410,193 1,757,231
Liabilities: 1,544,148 3,818,142
Non-current liabilities 2,532,573 250,229 3,756,191
Employee benefit liabilities 2,785,108 2,129,792 27
5,548,031 2,466,410
Deferred tax liabilities 4,993,995
Finance lease obligation
Total non-current liabilities
Current liabilities
Trade and other payables
Finance lease obligation
Income tax liabilities
Total current liabilities
Total liabilities
TOTAL EQUITY AND LIABILITIES
Source: Company’s Annual Financial Statements (2015-2019)
13. CONSOLIDATED FINANCIAL INFORMATION
CONSOLIDATED STATEMENT OF CASHFLOW
RED STAR EXPRESS PLC
The Group
March March March March March
2019 2018 2017 2016 2015
N ‘000 N ‘000 N ‘000 N ‘000 N ‘000
CASHFLOW FROM OPERATING ACTIVITIES 9,762,597 7,515,467 6,786,095 6,767,168 6,040,704
Cash received from customers ( 8,820,619) ( 6,630,939) ( 6,211,958) ( 6,264,769) ( 5,423,765)
Cash paid to suppliers and employees
Cash outflow from long term payment ( 120,417) ( 220,890) - ( 151,962) ( 115,570)
Tax paid ( 83,774) ( 61,808) ( 75,792) ( 53,886) ( 31,252)
Net cash provided by operating activities 737,787 601,830 498,345 296,551 470,117
CASHFLOW FROM INVESTING ACTIVITIES ( 466,243) ( 413,695) ( 509,226) ( 123,328) ( 219,163)
Purchase of property, plant and equipment ( 40,335) ( 30,060) ( 20,198) ( 1,337) ( 9,829)
Purchase of intangible assets 1,928 558 5,942 18,439 17,228
Proceeds from sale of property plant and equipment 2,398 - - - -
Refund from PPE vendor 12,794 23,318 17,684 7,415 13,205
Interest received - - - - -
Dividend received
Net cash outflow from investing activities ( 489,458) ( 419,879) ( 505,798) ( 98,811) ( 198,559)
CASHFLOW FROM FINANCING ACTIVITIES
Proceeds from finance lease obligation 48,300 114,175 72,000 - -
Dividend paid ( 216,697) ( 216,272) ( 185,692)
Interest paid ( 193,780) ( 161,253)
Payment of finance lease obligation ( 33,906) ( 27,760) ( 21,110) ( 10,788) ( 17,337)
Refund of unclaimed dividend from registrars ( 71,395) ( 33,743) ( 5,020) ( 33,436) ( 26,886)
Net cash outflow from financing activities - - -
- 13,556
( 273,698) ( 150,044) ( 139,822) ( 238,004) ( 205,476)
Net increase/ (decrease) in cash and cash equivalents ( 25,369) 31,907 ( 147,275) ( 40,264) 66,082
( 2,165) 4,300 25,802 - -
Net foreign exchange difference 549,868 635,134
Cash and cash equivalents at the beginning of the 522,334 513,661 675,398 609,316
year 549,868 513,661 635,134 675,398
Cash and cash equivalents at the end of the year
Source: Company’s Annual Financial Statements (2015-2019)
28
14. STATUTORY AND GENERAL INFORMATION
INCORPORATION AND SHARE CAPITAL HISTORY
Red Star Express PLC was incorporated on 10 July, 1992 and it commenced business on 12 October, 1992.
The Company became a public limited liability company on 9 July, 2007 and subsequently listed its shares
on the Nigerian Stock Exchange (NSE) on November 14, 2007.
The Company’s initial authorized share capital was ₦7million comprising 7 million ordinary shares of ₦1.00
each and subsequently increased at various stages. The Company’s shares were subdivided into ordinary
shares of 50 kobo each in 2006. The Company’s authorized share capital is currently ₦500 million,
comprising 1 billion ordinary shares of 50 Kobo each with an issued share capital of ₦294,748,380
representing 589,496,760 ordinary shares of 50 Kobo each.
The following changes have taken place in the authorized and issued share capital of the Company since
incorporation.
Year Authorized ₦’000 Issued & Fully paid up ₦’000 Consideration
1992 Increase Cumulative Increase Cumulative Cash
1993 -
1994 7,000,000 7,000,000 3,570,186 3,570,186 -
1995 -
1996 14,000,000 21,000,000 - 3,570,186
1998 Cash
1999 7,000,000 28,000,000 - 3,570,186 Cash
2000 Cash
2001 17,000,000 45,000,000 - 3,570,186 Cash
2002 Cash
2003 - 45,000,000 38,358,445 41,928,631 Cash
2007 Cash
2008 - 45,000,000 1,238,534 43,167,165 Bonus Issue
2013 Cash
- 45,000,000 298,947 43,466,112
-
- 45,000,000 593,550 44,059,662
- 45,000,000 102,501 44,162,163
- 45,000,000 5,000 44,167,163
10,000,000 55,000,000 7,282,468 51,449,631
245,000,000 300,000,000 205,798,524 257,248,155
-- 37,500,000 294,748,380
200,000,000 500,000,000 - 294,748,380
SHAREHOLDING STRUCTURE
As at 31 March 2019, the Company had approximately 4,467 shareholders with four (4) shareholders
owning more than 5% (as displayed in the table below).
Shareholder Shareholding %
Koguna Mohammed Hassan 109,409,912 18.6
Koguna Babura Insurance Brokers Limited 15.1
Stanbic Nominees Nigeria Limited 88,701,159 10.9
Petra Properties Limited 64,067,417 10.1
59,553,504
Beneficial owners of nominee shareholding of 5% of the capital apart from pension funds:
Name Shareholding %
JP Morgan Chase Bank NA 62,824,617 10.7
29
14. STATUTORY AND GENERAL INFORMATION
DIRECTORS’ BENEFICIAL INTEREST
The interests of the Directors of Red Star Express PLC in the issued share capital of the Company as
recorded in the Register of Members and as notified by them for the purpose of Section 275 (1) of the
CAMA, as at 31 March, 2019 are as follows:
DIRECTOR NO OF SHARES - NO OF SHARES TOTAL NO OF % OF ISSUED
DIRECT - INDIRECT SHARES SHARE CAPITAL
Suleiman Barau
Sola Obabori 4,000,000 - 4,000,000 0.68
Victor Ukwat 356,896 - 356,896 0.06
Auwalu Babura 54,377 - 54,377 0.01
Sule Umar Bichi 112,178 - 112,178 0.02
Aminu Dangana - 0.92
Sulaiman L. Koguna 5,416,680 - 5,416,680 0.02
Chioma Sideso 110,000 - 110,000 0.68
-
4,020,430 4,020,430 -
Nil -
STATEMENT OF INDEBTEDNESS
As at 31 March 2019, Red Star Express PLC had a finance lease obligation amounting to ₦124,317,000
(One Hundred and Twenty-Four Million, Three Hundred and Seventeen Thousand Naira).
OFF BALANCE SHEET ITEMS
No off-balance sheet item was reported in the audited financial statement as at 31 March 2019.
CLAIMS AND LITIGATIONS
As at the date of this Right Circular, Red Star Express Plc is currently involved in fifteen (15) pending cases,
fourteen (14) of which were instituted against the Company, and one (1) by the Company. A review of
these cases was conducted to confirm their status and ascertain the “Contingent Liability” of the
Company.
The schedule of claims for and against the Company is detailed below:
Details No of Claims Amount of Claims
Claims instituted by the Company 1 ₦4,188,025.65
Claims instituted against the Company 14 ₦189,976,826.74
$5,000
30
14. STATUTORY AND GENERAL INFORMATION
Please note that in addition to the delineated figures above, the Claimants/Plaintiffs in some of these
cases, have also demanded for interest on the amounts claimed against the Company. Furthermore, in
some matters, accrued salaries were being claimed against the Company and the term “substantial
amount” was also used to delimit the amounts being claimed by the Claimants/Plaintiffs.
Based on the review of 15 cases for and against the Company, the Solicitors are of the opinion that the
claims and litigations are not likely to have any material adverse effect on the Company and/or the Right
Issue and are not aware of any pending or threatened claims or litigation involving the Company other
than those disclosed above.
UNCLAIMED DIVIDENDS
The total amount of unclaimed dividends as at 31 March 2019 is ₦97,063,000 (Ninety-Seven Million, and
Sixty-Three Thousand Naira) domiciled in Fidelity Bank PLC (₦50,000,000) and First City Monument Bank
Limited (₦47,063,000) respectively. In addressing the issue of unclaimed dividend, the Company has put
in place various measures to create awareness, which include making it available at AGMs and
encouraging shareholders to open e-dividend accounts to enable payments directly into shareholders
accounts on every dividend payment day.
PURPOSE OF THE RIGHTS ISSUE
The Company will apply the net proceeds of the Rights Issue to expand its current operations by
developing two (2) warehouses, purchase trucks, improving its use of technology and fund working
capital.
Utilization Capital to be Raised (%) Expected Completion
(N’ 000) Period
Developing warehouse facilities @ Lagos- Ibadan Expressway 704,000 54 18 months
and Murtala Muhammed 1 Airport Cargo Terminal 201,648 15 3 months
Purchase of Trucks 154,288 12 18 months
Group ICT Improvement / Enterprise Resource Planning 250,000 19 Immediate
Solution 1,309,936 100
Working Capital
Total
RELATED PARTY TRANSACTIONS
The Company holds 100% shareholding in Red Star Freight Limited, Red Star Support Services Limited and
Red Star Logistics Limited. The transactions with the related party are made on similar terms with those
of arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free. There
have been no guarantees received for any related party receivables. For the year ended 31 March 2019,
the Company has not recorded impairment of receivables relating to amounts owed by related parties.
This assessment is undertaken each financial year by examining the financial position of the related party
and the market in which the related party operate. The following table provides the total amount of
31
14. STATUTORY AND GENERAL INFORMATION
transactions that have been entered into with related parties for the relevant financial year. It is the
Group’s policy not to recognize impairment on related parties’ transactions.
Related Companies: Nature of transaction Transaction value Balance
Red Star Freight Ltd receivables/(payable)
Freight and custom ₦’000
Red Star Logistics Ltd clearance 196,337 2019
Haulage and warehouse ₦’000
Red Star Support Services Ltd services 241,690
Mail management and
dispatch services 183,692 668,938
133,147 (127,233)
COST AND EXPENSES
The costs and expenses of this Issue including fees payable to the SEC, the NSE and professional parties,
filing fees, stamp duties, legal fees, brokerage commission, printing and advertising costs and
miscellaneous expenses are estimated at ₦37,484,886 representing 2.78% of the gross amount to be
raised.
MATERIAL CONTRACTS
The following material contracts have been entered into by Red Star Express PLC:
1. Global Service Program contract between Federal Express Europe Inc. & Co. and Red Star Express
PLC; and
2. Vending Agreement dated 25 October 2019 between Red Star Express Plc and the Issuing Houses.
RELATIONSHIP BETWEEN THE COMPANY AND ITS ADVISERS
No relationship other than the professional ones established pursuant to this Issue exists between the
Issuer and any of its advisers, save for in the ordinary course of business.
CONSENTS
The following have given and have not withdrawn their written consents to the issue of this Rights Circular
with their names and reports (where applicable) to be included in the form and context in which they
appear:
Directors: Mr. Suleiman Barau
Mr. Obabori Peter Olusola
Mr. Babura Auwalu Badamasi
32
14. STATUTORY AND GENERAL INFORMATION
Company Secretary: Mr. Ukwat Enobong Victor
Lead Issuing House: Mrs. Chioma Sideso
Joint Issuing House: Alhaji. Aminu Dangana
Solicitors to the Issue: Mr. Suleiman Lawan Koguna
Mr. Sule Umar Bichi
Stockbrokers to the Issue:
Mrs. Frances Ndidi Akpomuka
Auditors:
Registrars: FBNQuest Merchant Bank Limited
Receiving Bank:
Meristem Capital Limited
Tokunbo Orimobi LP
APT Securities & Funds Limited
Cordros Securities Limited, FCSL Asset
Management Limited, Mega Equities Limited,
PAC Securities Limited, APEL Asset Limited
Ernst & Young
United Securities Limited
First Bank of Nigeria Limited
RESEARCH AND DEVELOPMENT
The Company continually explore ways of enhancing its operations, expanding its operations and ensuring
all stakeholders are adequately catered for. As a result, the Company ensures all its personnel are
adequately trained. However, in the last three years the Company did not expend any amount on research
and development.
MERGERS AND ACQUISITIONS
As at the date of this Rights Circular, Red Star Express PLC is not aware of any attempt by any investor
trying to acquire a majority shareholding in the Company nor is the Company actively seeking to acquire
a majority stake in any other entity.
DECLARATIONS
Except as otherwise disclosed herein:
1. No share of the Company is under option or agreed conditionally or unconditionally to be put under
option
2. There are no long-term service agreements between the Company and any of the Directors and
employees except pension agreements
33
14. STATUTORY AND GENERAL INFORMATION
3. The Company also hereby declares that none of its directors or management staff is subject to any of
the following in Nigeria or elsewhere:
a. A petition brought under any bankruptcy or insolvency proceedings either against his/her
person or against any partnership or company of which he or she is a partner, director or key
personnel;
b. A conviction in a criminal proceeding relating to fraud or dishonesty;
c. A judgment or a ruling by a regulatory body relating to fraud or dishonesty restraining him/her
from acting as an investment adviser, dealer in securities, director or employee of a financial
institution and engaging in any type of business practice or activity.
OVERVIEW OF CORPORATE GOVERNANCE
Red Star Express PLC is committed to ensuring sound corporate governance principles are maintained
throughout the Group. The Group abides by applicable rules and regulations of corporate Governance
and maintains best practices. During the period under view, the Directors and staff complied with
applicable rules and regulations.
The Board of Directors
The Board has as its main responsibility the duty of setting the strategic direction for the Company as well
as maintaining oversight function on other activities of Management.
The Board is made up of eight (8) Directors, possessing relevant knowledge and skills in the fields of
Accounting, Insurance, Strategy and Corporate Governance, Sales and Marketing amongst others.
The Board is made up of a Non-Executive Chairman, four (4) Non-Executive Directors and three (3)
Executive Directors. The position of the Chairman and Managing Director are separate. The
responsibilities of the Board are as contained in the Board Charter.
Board committees
The Board carries out its oversight functions via its Committees governed by Charters and definite Terms
of Reference. The Board Committees include:
Strategy and Business Development Committee
This committee is charged with the responsibility to review and advice on long term strategy and major
business initiatives of the Company. The committee is comprised of seven (7) members; three (3)
Executive Directors and four (4) Non-Executive Directors.
Governance, Nomination and Remuneration Committee
This committee is comprised solely of Non-Executive Directors and chaired by the Chairman of the Board.
The Committee’s terms of reference are in line with SEC Code of Corporate Governance 2011.
Risk Management Committee
34
14. STATUTORY AND GENERAL INFORMATION
The Committee in line with its Terms of Reference is charged with the review of risks and recommendation
of plans to hedge against risks. The committee is comprised of 6 members; three (3) Executive Directors
and three (3) Non-Executive Directors.
Audit Committee
The responsibilities of the Audit committee are governed by Section 359 (6) of the Companies and Allied
Matters Act, CAP C20, LFN 2004. The committee is comprised of six (6) members; three (3) Non-Executive
Directors and three (3) shareholders representatives.
Below are the compositions of the various Committees as at 31st March 2019:
S/N Name of Committee Committee Members
1 Strategy and Business Development Committee Chioma Sideso (Chairman)
Sulaiman Koguna
Alhaji Aminu Dangama
Sule Umar Bichi
Sola Obabori
Victor Ukwat
Auwalu Babura
2 Governance, Nomination and Remuneration Alhaji Aminu Dangama (Chairman)
Committee Sule Umar Bichi
Chioma Sideso
3 Risk Management Committee Sule Umar Bichi (Chairman)
Alhaji Aminu Dangama
Sulaiman Koguna
Sola Obabori
Victor Ukwat
Auwalu Babura
4 Audit Committee Mr. Moses Ayodel Ogundeji (Chairman)
Chief Cyril Ugwumadu
Mr. Kolawole Ganiyu Amoo
Sule Umar Bichi
Sulaiman Koguna
Chioma Sideso
Management committee
Group Executive Committee
This is the highest governing body of management and it is led by the Group Managing Director and
supported by the Executive Directors, Divisional Managing Directors and Departmental Heads. The Group
Executive Committee (“GEC”) meets bi-weekly or as business need demands to deliberate on
implementation of Board approved strategies and ensure the effective and efficient deployment of
Company’s resources. Whilst the Management team at subsidiary levels meet weekly or as business
demands.
35
14. STATUTORY AND GENERAL INFORMATION
DOCUMENTS AVAILABLE FOR INSPECTION
Copies of the following documents may be inspected at the offices of the Issuing Houses during normal
business hours on any weekday (except public holidays):
1. The Certificate of Incorporation of the Company, duly certified by the CAC;
2. The Memorandum and Articles of Association of the Company, duly certified by the CAC;
3. The Board resolution authorizing the Rights Issue, dated 3rd September 2019 passed at the meeting
of the Board of Directors, signed by a Director and the Company Secretary;
4. The resolution of the shareholders passed at the AGM dated 31 August 2017, approving the Capital
Raising Exercise, duly certified by the CAC;
5. The Company’s Audited Accounts for the financial years ended March 2015, March 2016, March
2017, March 2018 and March 2019 presented in accordance with the International Financial
Reporting Standards;
6. The schedule of the Claims and Litigation referred to on pages 30;
7. Letters of approval from SEC and the NSE;
8. The material contract referred to on page 32; and
9. The written consents referred to on page 32 - 33.
36
15. PROVISIONAL ALLOTMENT LETTER
25 October, 2019
Dear Sir/Madam,
RIGHTS ISSUE OF 336,855,291 ORDINARY SHARES OF 50 KOBO EACH AT N4.00 PER SHARE IN RED STAR
EXPRESS PLC
1. Provisional Allotment
The Chairman’s letter dated 18 July 2019 on page 13 - 14 of this Rights Circular contains particulars of the
Rights Issue now being made. The Directors have provisionally allotted to you the number of Ordinary
Shares set out on the first page of the enclosed Acceptance/Renunciation Form, representing four (4) new
ordinary shares for every seven (7) ordinary shares registered in your name at the close of business on 21
August 2019. The new Ordinary Shares will rank pari passu in all respects with the existing Ordinary Shares
of the Company.
You may accept all or some of the shares offered to you or renounce your Rights to all or some of them.
If you are accepting the provisional allotment in full, kindly complete box A of the
Acceptance/Renunciation Form, while if renouncing your rights partially or in full, kindly complete box B
of the form. You may also apply for additional shares over and above your provisional allotment as
described in 2(b) below.
2. Acceptance and Payment
The receipt of any payment with your Acceptance/Renunciation Form will constitute an acceptance of all
or part of this allotment on the terms of this letter, subject to the Memorandum and Articles of Association
of the Company and to the clearance of the Securities and Exchange Commission. If payment is not
received by 18 December, 2019, the provisional allotment will be deemed to have been declined and will
be cancelled. You may participate in the Rights Issue through any of the following methods:
a) Full Acceptance
If you wish to accept this provisional allotment in full, please complete box A of the
Acceptance/Renunciation Form. The completed Acceptance/Renunciation Form together with a cheque
or bank draft or evidence of electronic payments for the full amount payable must be submitted to any
of the Receiving Agents listed on page 40 of this document not later than 18 December, 2019. The cheque
or draft must be made payable to the Receiving Agent, drawn on a bank in the same town or city in which
the Receiving Agent is located and crossed “RED STAR RIGHTS” with your name, address and daytime
telephone number (if any) written on the back of the cheque or draft. All cheques and drafts will be
37
15. PROVISIONAL ALLOTMENT LETTER
presented for payment upon receipt and all Acceptance/Renunciation Forms in respect of which cheques
are returned unpaid for any reason will be rejected and returned through the registered post.
Any payment made electronically or with a value exceeding N10 million should be made via SWIFT, RTGS
or NEFT into the designated Issue Proceeds Account stated on the Acceptance/Renunciation Form. Such
payment must include the following transfer instruction narrative: “[FULL NAME OF SHAREHOLDER] -
PAYMENT FOR RED STAR RIGHTS”.
Bank Name: First Bank of Nigeria Limited
Account Name: Red Star Express PLC Rights Issue
Account Number: 2034499843
Sort Code: 011152303
Evidence of all electronic transfers along with a copy of the Acceptance/Renunciation Form can also be
submitted electronically to any of the Issuing Houses stated below. If payment is not received by 18
December, 2019, the provisional allotment will be deemed to have been declined and will be cancelled.
Issuing House: FBNQuest Merchant Bank Limited
Email Address: [email protected]
Contact Numbers: +234 1 270 2290
Issuing House: Meristem Capital Limited
Email Address: [email protected]
Contact Numbers: +234 1 2707486, 2717356
b) Applying for Additional Shares
This may be done by completing item (ii) and (iii) of box A of the Acceptance/Renunciation Form. Payment
should be made in accordance with 2(a) above. Shareholders who apply for additional shares using the
Acceptance/Renunciation Form will be subject to the allotment process and in line with the SEC rules.
c) Partial Acceptance
To accept your provisional allotment partially, please complete box B of the Acceptance/ Renunciation
Form and submit the completed Acceptance/Renunciation Form to any of the Receiving Agents listed on
Page 40 of this document together along with full amount payable in respect of the number of shares you
wish to accept. Payment should be made in accordance with 2(a) above
3. Trading in Rights on the NSE
The approval of The Exchange has been obtained for trading in the Rights of the Company. The Rights will
be tradable between 11 November, 2019 and 18 December, 2019 at the price at which the Rights are
quoted on The Exchange. If you wish to trade your rights, you may do so on the floor of The Exchange
between these dates. Please complete item (iii) of box B of the Acceptance/Renunciation Form and
contact your stockbroker for assistance. If you wish to purchase renounced Rights, please contact your
stockbroker who will guide you regarding payment and the procedure for purchasing renounced Rights.
Any purchaser of Rights may also trade those Rights between these dates.
38
15. PROVISIONAL ALLOTMENT LETTER
4. Allotment of Additional Shares
Ordinary shares which are not taken up by 18 December, 2019 will be allotted, on a pro-rata (equal) basis
to existing shareholders who applied and paid for additional shares over and above their provisional
allotment by completing item (ii) of box A. Shares not taken up by shareholders after allotment will be
returned to Red Star’s authorized share capital as part of its un-issued shares.
5. Subscription Monies
Acceptance/Renunciation Forms must be accompanied with the full amount due on acceptance in
accordance with 2(a) above. All subscription monies will be retained in interest yielding bank accounts by
First Bank of Nigeria Limited, the Receiving Bank.
6. Surplus Application Monies
If any application for additional shares is not accepted or accepted for fewer shares than the number of
shares applied for; a cheque for the balance of the amount paid together with accrued interest will be
returned by registered post within 5 (five) working days of allotment. Shareholders who provided their
account details will be credited with the amount paid with accrued interest.
Any electronic payment with a value exceeding N10 million would be made via RTGS or NEFT into the
affected subscriber’s bank account details stated on the Acceptance/Renunciation Form.
7. Rounding Principle
The allocation of Rights Issue shares will be such that shareholders will not be allocated a fraction of a
Rights Issue share and as such any shareholding giving rise to a fraction of less than one of a Rights Issue
will be rounded to the nearest whole number.
8. Settlement
The CSCS accounts of Shareholders will be credited immediately from the date of allotment clearance by
the SEC.
Yours faithfully,
For: RED STAR EXPRESS PLC
Mrs. Frances Ndidi Akpomuka
Company Secretary
39
16. RECEIVING AGENTS
A copy of the Rights Circular has been forwarded to each of the shareholders whose names appeared in the Company’s Register of Members as at 21 August 2019. The completed Acceptance
Forms may be returned to any of the following Receiving Agents to whom brokerage will be paid at the rate of N0.50 kobo per N100 worth of shares allotted in respect of Acceptance Forms
bearing their official stamp.
The Issuing Houses cannot accept responsibility for the conduct of any of the institutions listed below. Shareholders are therefore advised to conduct their own enquiries before choosing an agent
to act on their behalf. Evidence of lodgment of funds at any of the Receiving Agents listed below, in the absence of corresponding evidence of receipt by the Issuing Houses cannot give rise to a
liability on the part of the Issuing Houses under any circumstances.
BANKS
Access Bank PLC First City Monument Bank Limited Polaris Bank Limited United Bank for Africa PLC
Citibank Nigeria Limited Guaranty Trust Bank PLC Stanbic IBTC Bank PLC Unity Bank PLC
Ecobank Nigeria Limited Heritage Bank PLC Standard Chartered Bank Nigeria Limited Wema Bank PLC
Fidelity Bank PLC Keystone Bank Limited Sterling Bank PLC Zenith Bank PLC
First Bank of Nigeria Limited Mainstreet Bank Limited Union Bank of Nigeria PLC
STOCKBROKERS AND OTHERS
Adamawa Securities Limited Enterprise Stockbroker PLC Lead Securities and Inv. Limited Riverside Trust Limited
Adonai Stockbrokers Limited Epic Investment Trust Limited Equity Lighthouse Asset Mgt Limited Rivtrust Securities Limited
African Alliance Stockbrokers Limited Capital Solutions Limited Lion Stockbrokers Limited Rostrum Inv& Sec Limited
Afrinvest (West Africa) Limited Eurocomm Securities Limited LMB Stockbrokers Limited Rowet Capital Mgt Limited
AIMS Asset Management Limited Excel Securities Limited Long Term Global Capital Limited Royal Crest Finance Limited
Alangrange Securities Limited Express Discount Asset Mgt Limited Mact Securities Limited Royal Trust Securities Limited
Allbond Investment Limited Express Portfolio Services Limited Magnartis Fin & Inv Limited Santrust Securities Limited
Alliance Capital Managt Co. Limited FCSL Asset Management Company Mainland Trust Limited Securities Africa Financial Limited
Altrade Securities Limited Limited Maninvest Securities Limited Securities Solutions Limited
Amyn Investments Limited Falcon Securities Limited Marina Securities Stockbroking Securities Trading & Investments
Anchorage Sec & Finance Limited FBC Trust & Securities Limited Services Limited Limited
Anchoria Inv& Securities Limited FBNQuest Securities Limited Maven Asset Mgt Limited Shelong Investment Limited
Apel Asset Limited Financial Trust Company Nigeria Maxifund Invest & Sec. Limited Sigma Securities Limited
APT Sec. & Funds Limited Limited Mayfield Investment Limited Signet Investments & Securities
Arian Capital Management Limited Fidelity Securities Limited MBC Securities Limited Limited
ARM Securities Limited FinBank Securities Limited MBL Financial Services Limited Sikon Securities and Investment
Associated Asset Managers Limited Finmal Finance Company Limited MC-Finerco Investment limited Trust Limited
Atlass Portfolio Limited First Inland Capital Limited Mega Equities Limited Skyview Capital Limited
Belfry Stockbrokers Limited First Inland Sec. & Asset Mgt. Limited Mercov Securities Limited SMADAC Securities Limited
Bestlink Investment Limited FIS Securities Limited Meristem Securities Limited Solid-Rock Securities &
Bestworth Assets & Trust Limited Fittco Securities Limited Midas Stockbrokers Limited Investment Limited
BFCL Assets & Sec Limited Foresight Sec. & Inv Limited Mission Securities Limited Spring Trust & Securities Limited
BIC Securities Limited Forte Financial Limited Molten Trust Limited Springboard Trust & Inv Limited
Bytofel Trust & Securities Limited Forthright Securities & Investments Morgan Capital Sec Limited Stanbic IBTC Asset Mgt Limited
Cadington Securities Limited Limited Mountain Investment & Securities Stanbic IBTC Stockbrokers
Calyx Securities Limited Fortress Capital Limited Limited Limited
Camry Securities Limited FSDH Securities Limited Mutual Alliance Investments and Standard Alliance Capital & Asset
Capital Asset Limited Fund Matrix & Assets Mgt Limited Securities Limited Management Limited
Capital Bancorp Limited Future view Financial Services Network Capital Limited Standard Union Securities Limited
Capital Express Securities Limited Limited Networth Securities & Finance Limited Stanwal Securities Limited
Capital Trust Brokers Limited Future view Securities Limited Newdevco Investments & Securities Co Strategy and Arbitrage Limited
Cardinal Stone Securities Limited Gem Assets Mgt Limited Limited Summa Guaranty & Trust Co.
Cashcraft Asset Mgt. Limited Genesis Securites & inv. Limited Nigerian Intl Sec Limited PLC
Cashville Inv& Sec. Limited Gidauniya Inv. & Sec Limited Nigerian Stockbrokers Limited Summit Finance Company Limited
Centre-Point Inv. Limited Global Assets Mgt (Nig) Limited Nova Finance & Securities Limited Support Services Limited,
Century Securities Limited Global Inv. & Sec. Limited Oasis Capital Supra Commercial Trust Limited
Chapel Hill Denham Securities Limited Global View Consult & Investment Omas Investments & Trust Company TFS Securities & Investment
Chartwell Securities Limited Limited Limited Limited
Citi Investment Capital Limited GMT Securities Options Securities Limited The Bridge Securities Limited
City-Code Trust & Inv Limited Golden Securites Limited PAC Securities Limited Tiddo Securities Limited
Clearview Inv Co. Limited Gombe Securities Limited Parthian Partners Limited Tomil Trust Limited
Colvia Securities Limited Gosord Securities Limited Greenwich Partnership Investment Company Topmost Securities Limited
Compass Inv and Sec Limited Securities Limited Limited Tower Asset Management Limited
Consolidated Inv Limited GTI Capital Limited Peace Capital Market Limited Tower Securities & Investment
Consortium Investments Limited Harmony Securites Limited Peninsula Asset Mgt& Inv Co. Limited Co. Limited
Cordros Capital Limited Heartbeat Investments Limited Perfecta Inv Trust Limited Trade Link Securities Limited
Core Trust & Investment Limited Hedge Sec. & Inv. Co. Limited Phronesis Sec Limited Traders Trust & Investment
Covenant Securities & Asset Heritage Capital Mkt Limited Pilot Securities Limited Company Limited
Management Limited Horizon Stockbrokers Limited Pinefields Inv Serv Limited TransAfrica Financial Services
Cowry Asset Mgt Limited HP Securities Limited PIPC Securities Limited Limited
Cradle Trust Fin & Sec. Limited ICMG Securities Limited Pivot Trust and Investment Co Limited Transglobe Investment & Finance
Crane Securities Limited ICON Stockbroker Limited Platinum Capital Limited Co. Limited
Crossworld Securities Limited Imperial Assets Mgt Limited Plural Securities Limited Transworld Investment &
Crown Capital Limited IMTL Securities Limited PML Securities Company Limited Securities Limited
CSL Stockbrokers Limited Independent Securities Limited Portfolio Advisers Limited Tropics Securities Limited
Dakal Securities Limited Integrated Trust &Inv. Limited Primera Africa Securities Trust Yields Securities Limited
Davandy Finance & Sec Limited Intercontinental Securities Limited Prime Wealth Capital Limited Trust House Investments Limited
DBSL Securities Limited International Capital Sec. Limited Professional Stockbrokers Limited, TRW Stockbrokers Limited
De-canon Investments Limited International Standard Sec Limited Profund Securities Limited UBA Securities Limited
Deep Trust Investment Limited Interstate Securities Limited Prominent Securities Limited UIDC Securities Limited
De-Lords Securities Limited Investment Centre Limited Prudential Securities Limited UNEX Capital Limited
Dependable Securities Limited Investment One Financial Services Pyramid Securities Limited Union Capital Markets Limited
Diamond Securities Limited Limited Quantum Securities Limited, Valmon Securities Limited
Dolbic Finance Limited Investment One Stock Brokers Rainbow Securities and Investment Co. Valueline Securities &
Dominion Trust Limited International Limited Limited Investments Limited
DSU Brokerage Services Limited Investors & Trust Co Limited Readings Investment Limited Vetiva Capital Mgt Limited
Dunbell Securities Limited ITIS Securities Limited Redasel Investment Limited Vetiva Securities Limited
Dunn Loren Merrifield Securities Kakawa Asset Mgt Limited Regency Assets Mgt Limited Vision Trust & Investment Limited
Limited Kapital Care Trust & Sec. Limited Regency Financings Limited Wizetrade Capital & Asset
Dynamic Portfolios Limited Kedari Securities Limited Rencap Securities (Nig.) Limited Management Limited
ECL Asset Management Limited Kinley Securities Limited Resano Securities Limited WSTC Financial Services Limited
EDC Securities Limited Kofana Securities & Inv. Limited Resort Securities & Trust Limited WT Securities Limited
Edgefield Capital Management Limited Kundila Finance Services Limited Reward Investments and Services Yobe Inv. & Sec. Limited
Emerging Capital Limited Laksworth Inv. & Sec Limited Limited Yuderb Inv. & Sec. Limited
EMI Capital Resources Limited Lambeth Trust & Inv. Co. Limited Richmond Securities Limited Zenith Securities Limited
Empire Securities Limited LB Securities Limited
40
17. ACCEPTANCE/RENUNCIATION FORM
Form
RED STAR EXPRESS PLC
RIGHTS ISSUE OF
336,855,291 ORDINARY SHARES OF 50 KOBO EACH AT N4.00 PER SHARE
ON THE BASIS OF FOUR (4) NEW SHARES FOR EVERY SEVEN (7) SHARES HELD AS AT CLOSE OF BUSINESS ON 21 AUGUST 2019
PAYABLE IN FULL ON ACCEPTANCE
LEAD ISSUING HOUSE JOINT ISSUING HOUSE
INSTRUCTION FOR COMPLETING THE ACCEPTANCE / RENUNCIATION FORM
1. Acceptance and/or renunciation must be made on this Acceptance/Renunciation Form. Photocopies or scanned copies of the Form will be rejected.
2. Allottees should complete only ONE of the boxes marked A and B on the reverse of this form. Shareholders accepting the provisional allotment in full should
complete box A and submit their Acceptance/Renunciation Forms to any of the Receiving Agents listed on Page 40 of the Rights Circular together with a
cheque or bank draft made payable to the Receiving Agent for the full amount payable on acceptance. The cheque or draft must be crossed “RED STAR RIGHTS”,
with the name, address and mobile number of the shareholder written on the back.
Any payment made electronically or with a value exceeding N10 million should be made via SWIFT, RTGS or NEFT into the designated Offer
Proceeds Account stated below:
Account Details: First Bank of Nigeria Limited
Account Name: Red Star Express PLC Rights Issue
Account Number: 2034499843
Narration: “[Full Name of Shareholder]’s payment for Red Star Rights”
3. Shareholders accepting their provisional allotment partially should complete box B and submit their Acceptance/Renunciation Forms to any of the Receiving
Agents listed on Page 40 of the Rights Circular together with the evidence of payment transfer for the partial acceptance.
4. Shareholders who wish to trade their rights on the floor of The Exchange should complete item (iii) of box B.
They should obtain a Transfer Form from their stockbroker, complete it in accordance with these instructions, and return it to the stockbroker
together with the completed Acceptance/Renunciation Form and the amount payable/evidence of transfer for any partial acceptance in accordance with 2
above.
5. Shareholders who wish to acquire additional shares over and above their provisional allotment may purchase renounced rights by contacting their stockbroker,
and/or apply for additional shares by completing item (ii) and (iii) of box A.
6. All cheques or bank drafts for amounts below ₦10 million will be presented for payment on receipt and all acceptances in respect of which cheques are
returned unpaid for any reason will be rejected and cancelled. Shareholders are advised to obtain an acknowledgement of the amount paid from the Receiving
Agent through which this Acceptance/Renunciation Form is lodged.
7. Joint allottees must sign on separate lines in the appropriate section of the Acceptance/Renunciation Form.
8. Acceptance/Renunciation Forms of corporate allottees must bear their incorporation numbers and corporate seals and must be completed under the hands
of duly authorized officials who should also state their designations.
FOR REGISTRARS’ USE ONLY
Number of ordinary Additional ordinary Additional ordinary Total amount Amount to be
shares applied Payable returned/cheque/
Amount paid
allotted N bank draft number
shares accepted shares applied for
NN
41
17. ACCEPTANCE/RENUNCIATION FORM
PLEASE TURN OVER
ACCEPTANCE/RENUNCIATION FORM
Acceptance List Opens Acceptance List Closes
11 November, 2019 18 December, 2019
Care should be taken to comply with the instructions set out on the front of this form. If you are in doubt as to what action to take, you should immediately consult your Stockbroker,
Accountant, Banker, Solicitor, Independent Investment Adviser or any other professional adviser for guidance.
Investor’s Stockbroker……………………………………………CHN Number………………………………………...............
Stockbroker Code………………………………………………….CSCS Number………………………………………..............
If you wish to trade in rights, please contact your stockbroker who will guide you regarding payment and the procedure for purchasing Red Star Rights.
A. FULL ACCEPTANCE/REQUEST FOR ADDITIONAL ORDINARY SHARES
i. I/We accept in full, the provisional allotment shown on the front of this form
ii. I/We also apply for additional Ordinary Shares: Additional amount payable at N=4.00 per share
Number of Additional Ordinary Shares applied for
N=
I/We agree to accept the same or smaller number of additional shares in respect of which allotment may be made to me/us, in accordance with the Provisional Allotment
Letter contained in the Rights Circular.
iii. I/We enclose my/our cheque/bank draft/evidence of payment transfer for N=............................................................................................................................................. being the sum of the amount
payable as shown on the front of this form, and the additional amount payable as shown in item (ii) above.
Cheque details: Name of bank/cheque number/branch.........................................................................................................................................................................................
.......................................................................................................................................................................................................................................................................................................................
B. RENUNCIATION OR PARTIAL ACCEPTANCE 2 3
Amount payable at N=4.00 per share Number of Ordinary Shares renounced
1
Number of Ordinary Shares accepted N=
i. I/We accept only the number of Ordinary Shares shown in column (1) above and enclose my/our cheque/bank draft for the value shown in column (2) above.
Cheque details: Name of bank/cheque number/branch..........................................................................................................................................................................................................
.................................................................................................................................................................................................................................................................................................................................................
ii. I/We hereby renounce my/our rights to the Ordinary shares shown in column (3) above, being the balance of the Ordinary Shares allocated to me/us
iii. I/We confirm that I/We wish to trade my/our rights of ....................................................................................... Ordinary Shares (being my/our renounced shares as shown
in Column (3) above) on the floor of The Exchange. I/We shall obtain a Transfer Form from my/our stockbroker, complete it in accordance with his instructions and return
it to the stockbroker with the form
MUST BE FULLY COMPLETED FOR BOTH A AND B
Name (s) (in block letters)
Next of Kin
Daytime Telephone Number Mobile (GSM) Telephone Number
Email Address
BANK DETAILS (FOR E-DIVIDEND)
Account Name Branch Incorporation Number and Seal of
Bank Name BVN Corporate Allottee
Account Number
Signature 2nd Signature (Joint only)
Name of Authorised Signatory (corporate only): Name of Authorised Signatory (corporate only):
Designation (corporate only): Designation (corporate only):
42
17. ACCEPTANCE/RENUNCIATION FORM
C. TRADING IN RIGHTS
STAMP OF RECEIVING AGENT
i) Shareholders who wish to trade in their rights partially or in full may trade such rights on the floor of The Exchange. The rights will be traded actively on the floor of
The Exchange
ii) Shareholders who wish to acquire additional shares over and above their provisional allotment may purchase traded rights (see iv), and/or apply for additional shares
by completing item (ii) of box A above.
iii) Shareholders who purchase rights on the floor of The Exchange are guaranteed the number of shares purchased: they will not be subject to the allotment process
in respect of shares so purchased. Those that apply for additional shares by completing item (ii) of box A will be subject to the allotment process i.e. they may be
allotted a smaller number of additional shares than what they applied for.
iv) If you wish to purchase renounced rights, please contact your stockbroker who will guide you regarding payment and the procedure for purchasing Red Star rights.
43
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