Debt-burdened Deap Capital changing name as it shifts to minerals

Financial services firm Deap Capital Management & Trust Plc is moving to overhaul its identity and capital structure as it battles a nearly ₦2 billion equity deficit that has weighed on its balance sheet for years.

Ahead of its March annual general meeting, the company has proposed changing its name to Critical Minerals Financing Corporation Plc (CMFC Plc), expanding authorised share capital from ₦1.5 billion to ₦5.03 billion, and granting directors sweeping authority to raise fresh equity through private placements and other instruments.

The proposed expansion would create more than 7 billion new ordinary shares, paving the way for a planned ₦6 billion equity injection from Banklink Africa Private Equities Limited and its partners.

The scale of the recapitalisation reflects the company’s fragile financial position.

As of December 31, 2025, Deap Capital reported total assets of ₦310.2 million and cash holdings of ₦9.9 million. Total liabilities stood at ₦2.3 billion, leaving the firm with an equity deficit of ₦1.99 billion — the result of accumulated losses and prolonged capital erosion.

Although the company returned to quarterly profitability with ₦2.4 million in profit, reversing a ₦9 million full-year loss in September 2025, the earnings rebound remains modest relative to its obligations.

On February 6, Deap Capital announced receipt of a ₦1 billion deposit for shares from Banklink Africa — the first tranche of a ₦6 billion commitment. The remaining ₦5 billion is expected after shareholder approval at the AGM and regulatory clearance.

“With the completion of this first tranche, DEAPCAP is positioned to satisfy the Securities and Exchange Commission’s recapitalisation requirements for Tier 1 Issuing House license amongst others,” the company said.

Chairman Kenneth Olise described the investment as transformative. “The accelerating global demand for critical minerals and rare earths has redefined the strategic importance of mineral-rich economies. Africa cannot be left behind in this emerging era. This Banklink Africa investment is a watershed for DEAP Capital,” he said at the signing ceremony in Lagos.

Dilution Risk

The recapitalisation, however, is likely to significantly dilute existing shareholders. The board is seeking authority to disapply pre-emption rights, allowing shares to be allotted to new investors on terms determined by directors — a move that could materially reshape ownership.

If successful, the capital raise would eliminate negative equity, restore regulatory compliance, and support the company’s pivot into financing Africa’s critical minerals and rare earth value chains, a strategy first outlined in its January agreement with Banklink Africa.

Execution remains the central risk. With a relatively small asset base, heavy liabilities and limited operating history in minerals finance, Deap Capital’s turnaround depends on deploying fresh capital into revenue-generating ventures in a competitive, capital-intensive sector.

Investors, whose enthusiasm earlier this year drove the stock sharply higher before recent pullbacks, will now look to the AGM for clarity on structure, valuation and the long-term viability of what amounts to a high-stakes reset.