“On the next item, Capital Investment Fund has successfully put up subordinated bonds for issue in the United States capital market approximating two point five billion naira in aggregate principal amount, with a rate of 9% for ten years. The bonds are scheduled to mature ten years hence, although Bestman has the option to redeem them on any interest payment date hereafter. The bonds were rated BB- by Standard & Poor‘s, and their value will be third only to the bonds issued by GTBank and First Bank in January and March of this year.”
A loud round of applause greeted this announcement but before Edward could breathe easier, a shareholder asked to speak. “My name is Stefan Brugman of Stivet Funds. Our shareholders have seen Bestman shares drop in value, but you and your team continue to receive bonuses and will get more if this bond is passed. Also, the shareholder return is less than it should be. Our mutual fund holders are against any bonus to management. You mention predetermined financial targets and annual objectives, but these are not presented. So we have no idea what this is based on. We need to know this because we have seen several cases where companies take advantage of shareholders‘ ignorance.”
Edward was irritated by this last speaker; he knew he was a broker and was on Mr. Odusote‘s side. He paused and looked around at the surprised faces that were turned attentively up to him.
“The greatest share of the net proceeds of this hybrid offer will go into working capital. According to the offer prospectus, which is being handed out now, and which will be made available to journalists at the completion of this meeting, the sum of a hundred and fifty million naira will be used to beef up the company‘s working capital on a continuous basis and deepen the telecommunications retail infrastructure in the country.
“We may also consider investing in a manufacturing plant in China to help cut our costs and support business growth. Using the proceeds in this way will enable the telecommunications arm contribute better to Bestman Group‘s bottom-line growth within the next two years. We‘ll invest fifty million in branches for Capital Investments in four cities. Our information technology infrastructure is already being upgraded, but it will require an extra ten million in order to give us a competitive edge in the market.”
Another broker cut in. “I‘m Etim Udoh and I represent the Nakanda Family. Regarding the prognosis for 2007 you mention a turnover of one billion five hundred million naira. Is this realistic? I support the other speaker in saying that there has to be a clear relation between shareholders returns and bonuses, and my group rejects all the bonuses that have been planned.”