Flour Mills of Nigeria Plc plans to offer 1.09 billion ordinary shares of 50 kobo each to existing shareholders at N27.50 per share, according to a rights application filed by the flour-milling company yesterday.
Contrary to earlier indication that it might raise N40 billion, Flour Mills would be raising about N30 billion from existing shareholders. Flour Mills’ share price fell by 4.98 per cent from N29.50 to close yesterday at N28.03.
According to the rights proposal filed at the Nigerian Stock Exchange (NSE), shareholders on register of the company as at the close of business yesterday would be pre-allotted five new ordinary shares of 50 kobo each for every 12 ordinary shares of 50 kobo each held.
Shareholders of the company had last month approved resolutions authorizing the company to increase its authorised share capital and raise about N40 billion new equity funds from existing shareholders.
The extraordinary general meeting of shareholders increased the company’s authorized share capital from N2 billion to N2.5 billion through the creation of additional 1.0 billion ordinary shares of 50 kobo each. In the event of under-subscription, the board also received shareholders’ mandate to allocate unsubscribed rights’ shares to interested investors. Shareholders also empowered the board of directors to use net proceeds of the rights issue to meet the funding requirements of the company.
In 2014, Flour Mills had distributed N5.01 billion as cash dividends on the basis of N2.10 per each ordinary share. Also, a total of 238.6 million ordinary shares of 50 kobo each were also distributed to shareholders through a bonus of one for 10 shares.
Key extracts of the audited report and accounts of Flour Mills for the year ended March 31, 2014 showed that turnover rose from N301.94 billion to N332.14 billion. Profit after tax however dropped from N7.54 billion in 2013 to N5.37 billion.
Flour Mills had recently embarked on group restructuring, strategic business acquisitions and investment in its core food business and backward integration programmes. It commissioned a 750,000 metric tons per annual sugar refinery built at a cost of $250 million in April 2013.
It has also continued to strategically invest in large scale commercial farming to support its food processing units with locally produced raw materials. The group had invested about N41 billion in capital projects in recent period including key projects such as flour capacity expansion in its Apapa mills, completion of Golden Snacks facility in Agbara, completion of Golden Sugar Refinery, establishment of new flour mill in Calabar, expansion of pasta & noodles lines and many major agro allied projects such as investments in Sunti Golden Sugar Estates and new animal feed mill and acquisition and development of large scale commercial farming.
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