Alios Finance Côte d'Ivoire has launched a CFA1.5 billion capital increase, about $2.7 million, through a public offering on the BRVM. The transaction will involve the issuance of 3,750,000 new shares at CFA400 each.

Existing shareholders in the vehicle and equipment financing company (BRVM: SAFC) will have preferential subscription rights, allowing them to maintain their ownership. For every 13 shares held, investors can subscribe to 6 new shares. Subscription rights will trade between April 27 and June 9, with subscriptions closing on June 11.

The capital raise is aimed at strengthening the company's equity base and meeting requirements set by the WAEMU Banking Commission, which directed the firm to increase its capital by at least CFA1 billion.

The move follows a period of weak financial performance. The company reported losses between 2022 and 2024, though net losses narrowed to CFA165 million in 2024 from CFA579 million a year earlier.

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The operation also supports a broader recovery plan following a change in ownership. Credaf Group acquired a 52.02% stake in December 2023, becoming the majority shareholder.

Key Takeaways

Alios Finance's capital increase reflects both regulatory pressure and the need to stabilize its financial position after several years of losses. Strengthening equity is critical for leasing companies, which rely on balance sheet capacity to finance assets and support lending growth. The rights issue structure allows existing shareholders to avoid dilution while providing new capital to the business. Despite recent losses, the company maintains a strong position in Côte d'Ivoire's leasing market, with more than 50% market share and assets of CFA73.3 billion. This suggests that operational challenges may be more linked to profitability and cost management than market demand. The entry of Credaf Group as majority shareholder is likely to play a key role in restructuring the business and restoring growth. For investors, the capital increase presents an opportunity to participate in a potential turnaround, though risks remain tied to execution, profitability, and regulatory compliance. For the sector, the move highlights ongoing efforts to strengthen financial institutions in WAEMU as demand for asset-based financing continues to grow.