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Starcomms Posts N5.3 billion Loss

By on December 26, 2012

CDMA operator, Starcomms has announced a N5.3 billion loss after nine months of operations. The company made the announcement prequel to its Annual General Meeting which is expected to take place on Friday, December 28th.

The company’s fortunes have continued to decline significantly as it also recorded a loss over the same period in 2011. The loss after 3Q, 2011 was N478.7 million.
A drastic reduction in revenue was part of the cause of the decline. Sales for the period was N7.5 billion in 2012, a 50% reduction from the N16.1 billion it posted in 2011.
The company is expected to chart a new course with its shareholders at the AGM on Friday.

Principal issues to be discussed is a share reconstruction exercise as well as the acquisition of 90.5% of the company by a strategic investor.
According to sources, “The main agenda of the meeting is the proposals that Starcomms reconstruct its current outstanding shares and subsequently offer 90.5 per cent post-reconstruction equity stake to Capcom in exchange for total investments of $210 million, about N32.7 billion through a private placement of shares.

“Starcomms has secured the statutory order of the Federal High Court to convene extra-ordinary general meeting of the company for consideration of the Scheme of Arrangement for the reconstruction and acquisition.”