Flour Mills of Nigeria Gets Regulators’ Nod on N40bn Rights Issue
Following the receipt of shareholders’ approval in May 2015 to raise additional capital via a Rights Issue, Flour Mills of Nigeria(FMN) Plc has now 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. This programme enables the company to raise funds in several tranches over a three-year period. The Rights Issue is being undertaken as part of the long-term plan to strategically position FMN for sustainable growth.
The company and all parties last Friday signed a pact on the rights issue.
FMN is to raise N39,855,845,286 to existing shareholders on the basis of nine new shares for every 16 shares held by shareholders, whose names appeared in the register of members of the company as at 08 December 2017 at an issue price of N27.00 per share.
Speaking at the signing ceremony, 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 valueaccretive opportunities, whilst giving greater operational and financial flexibility to ensure business growth and continuity.”
According to him, FMN has a long and rich history in Nigeria and continues to evolve into becoming the leading food and agro-allied group on the continent.
“FMN’s 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,” he added.
The company recently announced improved financial performance for the half year ended September 30, 2017, growing its revenue by 17 per cent from N255.30 billion in 2016 to N298.44 billion in 2017.
Profit before tax rose from N8.80 billion in 2016 to N13.38 billion in 2017, while profit after tax improved from N6.46 billion in 2016 to N9.36 billion in 2017.
Commenting on the results, Gbededo, said: “Our half year results show continued growth through most segments of our businesses, especially in the food business, delivering strong top and bottom line financials in line with our objectives. The Group recorded growth from volume and product mix. This growth was despite what continued to be a challenging business environment. Overall, the business shows an impressive performance in the first half of the year. We are positive that we are on track to meet our growth targets for the remaining part of 2017/18 financial year.”