By Nse Anthony-Uko
(Sundiata Finance) – Flour Mills of Nigeria (FMN) Plc at the weekend said it would be raising an additional capital of N39.9 billion through its existing shareholders.
Following the receipt of shareholders’ approval in May 2015 to raise additional capital through rights issue, the company had received clearance of the issue documents from the Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE) to proceed with series one of the rights issue programme.
The company in a statement signed by its secretary/director of legal services, Umolu Joseph said that the programme will enable Flourmills to raise funds in several tranches over a three-year period, saying the rights issue is being undertaken as part of the long-term plan to strategically position FMN for sustainable growth.
The company intends to raise N39.9 billion by way of rights to listing shareholders, on the basis of nine new shares for every 16 shares held by shareholder, whose names appeared in the register of members of the company as at December 8, 2017 at an issue price of N27 per share. The issue price represents a discount of 23 per cent to the FMN’s closing share price on the date of announcement.
At the signing ceremony in Lagos at the weekend, the group managing director of FMN, Mr. Paul Gbededo, said “the rights issue is part of our strategy to grow and build long-term value for all stakeholders.
“The proceeds from the rights issue will be used to strengthen the company’s capital base by deleveraging our balance sheet, supporting our working capital needs and positioning the company to exploit value-accretive opportunities, whilst giving greater operational and financial flexibility to ensure business growth and continuity.”
Flourmills To Commences N39.9bn Rights Issue
By Nse Anthony-Uko