Investors in Nigeria’s Capital Market have commended the new Milost Equity Subscription Agreement (MESA) initiative aimed at managing stocks efficiently in the country.
MESA was conceived to target companies that trade at less than half of their intrinsic value using a combination of debt and equity facilities.
Milost buys shares at a minimum 50 per cent premium of its market value and then pegs the price for 90 days.
“If the stock fails to exceed this threshold, the target company would pay the difference to Milost in the form of extra stocks and a penalty of 10 to 20 per cent of the discount that the share is trading at over a five-day period.
“The Milost Equity Subscription Agreement is a growth instrument that creates and builds confidence in the stocks of companies in which it invests.
“The targeted company cannot draw down the full committed facility in one tranche and is only allowed to use it from time to time over a three- to five-year period, with Milost eyeing a seven-to nine-year horizon for an exit,” it stated.
Milost Chief Investment Officer, Solly Asibey, said the financial engineering and structure of engagement of the initiative makes it easy for investors to invest heavily in companies with high growth potential, while reducing the risk of investments through checks and balances.
“Our success is intertwined with the success of our investing companies and from a corporate governance perspective, we subscribe to the rules and regulations of the Nigerian Stock Exchange (NSE), Central Bank of Nigeria (CBN) and Securities and Exchange Commission (SEC) in terms of our engagements,” he added.
Chief Executive Officer (CEO), Femab Properties, Abiodunn Aguda, noted that the funding structure of the initiative allows growth and development, which the country’s businesses and Africa needed.
Chairman, Resort Savings and Loans, Sunday Fajinmi also said: “Milost Global has been verified as a credible investor in developing economies like Nigeria. Their track records attest to their credibility.
Also speaking, Chief Executive Officer of Primewaterview, Harold Nzekwe, said the country needed foreign direct investments (FDIs) from serious investors to grow the economy.
On his part, Managing Partner and CEO of Milost, Kim Freeman, said: “Nigeria has the largest economy in Africa that is growing rapidly and Milost wants to be instrumental in sustaining the growth.”
By Kehinde Olatunji
The Guardian Newspaper March 22nd, 2018