The Nigerian Stock Exchange (NSE), on Thursday informed investors that the Rights issue of Flour Mills of Nigeria Plc will open for subscription between Monday, January 15 and Wednesday, February 21, 2018.
The company is seeking N39.855bn through an offer by way of rights issue of 1,476,142,418 ordinary shares of 50 kobo each to existing shareholders at N27.00 per share.
It is on the basis of nine ordinary shares for every 16 units held as at December 8, 2017, while the price represents a 23% discount to its “closing share price on the day of the announcement.”
Flour Mills had earlier informed the investment community in a statement by Umolu Joseph, Company Secretary/Director of Legal Services, that approval has been given by the Securities & Exchange Commission (SEC) and NSE.
The statement quoted Paul Gbededo, the company’s Group Managing Director as saying at the signing ceremony on Friday, January 5, 2018, that the offer “is part of our strategy to grow and build long-term value for all stakeholders.”
The offer proceeds, he continued, “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.”
The statement which listed IBTC Capital Limited as lead issuing house, while FBN Merchant Bank Limited and Zenith Capital Limited are joint issuing houses to the rights issue, did not however say when the issue would open or close.
The offer, the statement added, was approved by shareholders in May 2015 and is Series 1 of the rights issue programme, which enables the company raise funds in several tranches over a three-year period to strategically position FMN for sustainable growth.