Flour Mills N40b Rights Issue Subscription Begins Monday

By Dipo Olowookere

Flour Mills of Nigeria has announced that the subscription for its N40 billion Rights Issue will commence on Monday, January 15, 2018.

Business Post gathered that the exercise is expected to be wrapped up by the flour miller on Wednesday, February 21, 2018.

In a statement issued today by the Head of Listings Regulation Department at the Nigerian Stock Exchange (NSE), Mr Godstime Iwenekhai, the firm is offering about 1.5 billion ordinary shares of 50 kobo at N27 per share on the basis of nine new ordinary shares for every 16 ordinary shares held by shareholders as at December 8, 2017.

“Dealing Members are hereby notified that the Rights Issue of Flour Mills of Nigeria Plc of 1,476,142,418 ordinary shares of 50 Kobo each at the offer price of N27.00 per share on the basis of nine (9) new ordinary shares for every sixteen (16) ordinary shares held  as at 8 December 2017 will be opened for subscription as shown;

“Acceptance list opens: Monday, 15 January 2018 (and) acceptance list closes: Wednesday, 21 February 2018,” the statement noted.

Last week, Flour Mills confirmed receiving approvals from the NSE and the Securities and Exchange Commission (SEC) to go ahead with the exercise.

The issue price of N27, the firm said, represents a discount of 23 percent to its closing share price on the date of announcement.

Group Managing Director of Flour Mills of Nigeria, Mr Paul Gbededo, recently explained that, “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, whilst giving greater operational and financial flexibility to ensure business growth and continuity.”