Zenith’s 2024 Offer: Par Value and Price

Read the labels on the original instrument

Page 17 of Zenith’s rights circular offers 5,232,748,964 ordinary shares of 50 kobo each at ₦36 per share, on a one-for-six basis. The chair’s letter on page 25 separately names a public offer at ₦36.50 per share.

The 50-kobo phrase labels the shares’ nominal value. The two naira prices concern different offers. Neither the nominal figure nor one subscription price is a current market quotation, a personal valuation of Jim Ovia or a final record of cash received.

Sources for this section: [1] · [2]

Compare an intermediary record without losing units

CardinalStone’s overview also distinguishes the rights issue from the public offer. Its typography combines “₦0.50” and “Kobo”; it gives 23 September 2024 as the scheduled close.

The selected original circular instead prints 9 September in its original calendar.

Use the issuer’s unambiguous 50-kobo label and keep each schedule attached to its document. The two calendar statements are not an inspected extension order or completed-allotment notice. The exercise below stipulates its own inputs rather than treating a planned share count as shares ultimately issued.

Sources for this section: [2] · [1]

Ask which quantity a multiplication would produce

Under the conversion 100 kobo = ₦1, 50 kobo is ₦0.50. A share count multiplied by nominal value produces an aggregate nominal amount. Multiplying by an issue price produces a gross payment amount under the assumed full-payment conditions. Those products answer different questions.

Their difference is arithmetic, but calling an actual balance-sheet entry share premium requires the applicable accounting context. The original circular lists capital and premium separately; it is not a licence to infer net proceeds, expenses, allocations or investor returns from a headline. Here the bookkeeping rule is supplied explicitly for a fictional issuer.

Sources for this section: [1] · [2]

Work a fictional fully paid issue

A fictional issuer has 2000 existing shares and offers one new share for every five held. Assume all rights are accepted, paid and allotted. Each new share has nominal value ₦0.25 and issue price ₦12. For this exercise only, record cash less nominal capital as a premium amount and ignore all costs. These are invented inputs, not Zenith’s offer terms.

Task: calculate the new shares, cash, aggregate nominal capital and the stipulated premium. State the two monetary units clearly.

Reference answer: 2000 ÷ 5 = 400 new shares. Cash is 400 × ₦12 = ₦4800. Nominal capital is 400 × ₦0.25 = ₦100. The stipulated difference is ₦4700. The nominal value is 25 kobo per share, not ₦25; confusing those units would create a hundredfold error. None of the calculations establishes a market price, net proceeds after real costs or an expected return.

Sources for this section: [1] · [2]