By Chinwendu Obienyi
Flour Mills of Nigeria (FMN) Plc has received clearance from the Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE) to proceed with series one of the rights issue programme.
This follows the receipt of the firm’s shareholders’ approval in 2015 to raise additional capital through a rights issue programme which enables the company to raise funds in several shares over a three year period.
The Rights issue, according to the company, is being undertaken as part of the long term plan to strategically position the firm for sustainable growth for its stakeholders.
According to its Group Managing Director, Paul Gbededo, the proceeds from the rights issue will be used to strengthen the company’s capital base by deleveraging its balance sheet, supporting working capital needs and position the company to exploit opportunities to ensure business growth and continuity.
He said, “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”
Flour Mills is set to raise N39.9billion via the rights issue, offering its existing shareholders on the basis of 9 new shares for every 16 held at N27.00 per share.
According to a statement by the company Secretary, Umolu Joseph, the issue price represents a 23 per cent to its closing share price on the day of its announcement.
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.
