Eterna Plc has announced a ₦10 billion rights issue, offering existing shareholders the opportunity to deepen their stake at a significant discount as the company moves to strengthen its balance sheet and fund growth.
Under the offer, Eterna will issue 978.1 million new ordinary shares at ₦22.00 per share, on the basis of three new shares for every four shares held as of November 27, 2025. The rights issue opened on January 12, 2026, and will close on February 18, 2026.
Key terms at a glance
- Qualification date price: ₦35.50
- Current market price: ₦32.00
- Rights issue price: ₦22.00
- Discount to qualification date price: ₦13.50 (38%)
- Post-rights reference price: ₦29.71
The pricing represents a clear incentive for existing shareholders to participate, offering shares well below recent market levels.
Use of proceeds
Eterna plans to deploy the ₦10 billion as follows:
- ₦4.5 billion for debt reduction
- ₦3 billion for working capital
- ₦2 billion for capital expenditure and expansion
- ₦500 million to cover issue costs
The heavy tilt toward debt repayment signals management’s focus on easing financial pressure and improving cash flow.
As of September 2025, Eterna’s debt-to-equity ratio stood at about 7x, underscoring the strain of high borrowing costs on earnings. Reducing debt should lower interest expenses and improve earnings quality, even if the immediate impact on profitability is modest.
The enlarged share base will lead to short-term earnings per share (EPS) dilution. However, management expects lower finance costs and improved efficiency to offset much of the impact.
Full-year 2025 profit is projected at around ₦1 billion, implying an estimated 77 kobo EPS, while projected first-quarter 2026 earnings of ₦485 million suggest an EPS of about 21 kobo, even after factoring in the additional shares.
Investor takeaway
For existing shareholders, the rights issue offers:
- A chance to buy more shares at a steep discount and lower average holding cost
- Reduced balance sheet risk as debt levels fall
- Manageable dilution, largely offset by lower interest costs over time
