Flour Mills of Nigeria Plc recorded full subscription to its recent N39.9 billion rights issue, increasing the equity base of Nigeria’s largest flour-milling conglomerate.
Regulatory report at the Nigerian Stock Exchange (NSE) at the weekend indicated that a total of 1.476 billion ordinary shares of 50 kobo each were listed as additional shares in Flour Mills of Nigeria’s name. The additional shares arose from the N39.9 billion rights issue.
Flour Mills of Nigeria had sought to raise N39.85 billion through a rights issue of 1.476 billion ordinary shares of 50 kobo each at N27 per share. The rights were pre-allotted to shareholders on the basis of nine new ordinary shares of 50 kobo each for every 16 ordinary shares of 50 kobo each held as at Friday December 8, 2017. Application list for the rights opened on Monday January 15, 2018 and closed on Wednesday February 21, 2018.
With the supplementary listing, the total issued and fully paid up shares of Flour Mills of Nigeria now stands at 4.10 billion ordinary shares of 50 kobo each. The listing paved the way for trading on the supplementary shares.
The success of the new capital raising placed the flour-milling group in a better position to strengthen its balance sheet and support business growth.
Its Chairman, Mr. John Coumantaros, had said the rights issue would be used primarily to pay down some of the company’s outstanding short-term debt in order to reduce its finance costs, which have increased significantly in recent times.
He said the company will maintain and expand its market leadership across all its five core businesses and value chains.
He outlined that Flour Mills will improve route and extend its distribution footprint and launch new innovative consumer products like Gari, Margarine, spread, soya and vegetable oil, among others.
The company, he added, will continue to focus on supply chain security through import substitution and value chain diversification. “We will also continue to improve in our processing facilities and manufacturing excellence, which will lead to productivity and efficiency gains,” Coumantaros said.
Flour Mills of Nigeria Group Managing Director, Mr. Paul Gbedebo, explained that the rights issue was part of the group’s 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,” Gbedebo said.
He noted that Flour Mills has a long and rich history in Nigeria and continues to evolve into becoming the leading food and agro-allied group in Africa.
According to him, Flour Mills’ commitment to sustainability as a corporate strategy is shown in different levels of its operations and activities, while the company’s customer-centric culture remains focused on both product and process innovation aimed at building value for all stakeholders.
Source: The Nation