Flour Mills of Nigeria Plc has rounded off pre-offer processes and signed off documentation for its N39.9 billion rights issue, setting the stage for the opening of the application list for the new capital raising.
At the signing ceremony, which rounded off the pre-offer processes and documentations at the weekend, Flour Mills of Nigeria Plc Group Managing Director, Mr. Paul Gbededo, confirmed that the company has received regulatory approvals from the Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE) and is ready to proceed with the rights issue.
He said the rights issue will enable the company raise funds to support its long-term strategic plan with a view to ensuring sustainable growth for the company.
The company plans 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 will be 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.
Shareholders had at an extraordinary general meeting in 2015 authorised the directors to raise up to N40 billion of additional equity funds through a rights issue.
“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, while giving greater operational and financial flexibility to ensure business growth and continuity,” Gbededo 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.
In a statement at the weekend, its Company Secretary, Umolu Joseph, said the full terms of the rights issue will be set out in a rights circular to be mailed directly to shareholders of the company, which contains a provisional allotment letter and participation form.
Chairman, Flour Mills of Nigeria (FMN) Plc, Mr. John Coumantaros, in a recent review, noted that though the operating environment has been tough and challenging, the group can look to the future with confidence that its prospects are promising and bright while the fundamentals are strong.
According to him, the group sees opportunities in the challenges and is determined to explore them in the most profitable but sustainable manner.
“FMN is determined to continue to feed the nation every day. We shall keep maintaining our wide portfolio of high quality consumer food options and step up our input of locally sourced raw materials, thereby supporting the livelihood of Nigerian farmers and Nigerian businesses,” Coumantaros said.
He added that the group would continue to invest in growing portfolio of localised products in support of the nation’s economy.
He outlined that as the group strives to further restructure its operations, streamline business operations to focus on core businesses, constantly monitor and manage costs optimally, improve and re-engineer existing product range, the group will focus on innovation and develop new strategies for the market by making its products more visible and available at points of sale.
“We shall also continue to improve our sales, merchandising, redistribution personnel and activities,” Coumantaros said.
He reiterated the support of the group for the Federal Government’s backward integration policy, assuring that the group is determined to ensure that its agro-allied strategy provides sustainable returns on capital invested by maximising local content in group products.
He noted that in furtherance of the group’s vision to be involved at all stages of food value chain- from the farm to table, raw materials are being produced locally to ensure that good quality but fair value products are developed locally through the food supply chain to final consumer consumption.
“By our policy of aggregating grains and local farm products, we are creating jobs and boosting rural economy. We are determined to continue to ensure that our investments and processes aside from ensuring value for shareholders and other stakeholders continue to enrich the lives of our consumers, farmers, suppliers and other relevant stakeholders,” Coumantaros said.
He pointed out that by investing in the nation’s agricultural food-chain, the group is safeguarding its future and ensuring the sustainability of its businesses, noting that the backward integration programme is the most viable and sustainable thing to do.