By Modupe Gbadeyanka
The board of Flour Mills of Nigeria has disclosed that proceeds from its N39.85 billion rights issue would be used to expand its operations to make the firm more competitive as well as used to strengthen its balance sheet.
Speaking on Thursday at the Nigerian Stock Exchange (NSE) during its presentation of Facts Behind the Figures on the exercise, Chairman of Flour Mills, Mr John Coumantaros, stressed that this would bring about better returns for shareholders.
He noted that the rights issue would be used primarily to pay down some of the company’s outstanding short-term debt in order to reduce its finance costs, which have increased significantly in recent times.
“We will also continue to improve in our processing facilities and manufacturing excellence, which will lead to productivity and efficiency gains,” the Chairman said.
According to him, Flour Mills will maintain and expand its market leadership across all its five core businesses and value chains.
He outlined that Flour Mills would improve route and extend its distribution footprint and launch new innovative consumer products like garri, margarine, spread, soya and vegetable oil among others, adding that the firm will continue to focus on supply chain security through import substitution and value chain diversification.
Flour Mills of Nigeria is raising N39.85 billion through a rights issue of 1.476 billion ordinary shares of 50 kobo each at N27 per share.
The rights have been 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.
Application list for the rights opened on Monday January 15, 2018 and will run till the close of business on Wednesday February 21, 2018.
Adedapo Adesanya