Shareholders of Flour Mills of Nigeria (FMN) plc have approved the increment of the company’s authorised share capital from N2 billion to N2.5 billion by the creation of additional 1 billion ordinary shares of 50k each, ranking pari passu with the existing ordinary shares of the company.
As a result, the directors of the company were authorised to issue by way of rights to existing shareholders additional equity capital of up to N40 billion in the unissued share capital of the company.
The increment is said to be driven by the need for the company to quickly pay its outstanding debt of N160 billion, grow the company and the value of the shareholders.
The shareholders, who unanimously bought into the idea, also emphasised that the speed in which the offer was concluded was important, adding that transparent and accountability were key in making the offer a success.
Speaking during its extraordinary general meeting held in Lagos, John Coumantaros, chairman, FMN, said with all the regulatory steps taken by the company, he expected this to take effect in the beginning of October, after its annual general membership meeting.
Strategically, the company has looked at its performance and the fundamentals are such that it has to think of reducing its debt profile and that is why it is offering right issue to shareholders so that the company can reduce its leverage, grow as a company and grow the value of its shareholders, he said.
The increment of its share capital is strictly a measure to anticipate future difficulties, and take pre-emptive measures to ensure the company remains strong, h explained, saying that it is an opportunity for shareholders and the company to establish a strong capital base going forward.
Coumantaros mentioned some of the strategic investments of the company to include commissioning of new sugar refinery in Apapa, development of a 10,000 hectare sugar estate, and a mill at Sunti, ultra-modern pasta factory, Agbara snacks factory, fully intergrated edible oil extraction plant and new feed mill in Calabar, Cross Rivers State, among others.
He identified some of the company’s new products to include soya oil, pure vegetable oil, cube sugar, margarine and cheese balls.
In his words, Paul Gbededo, group managing director, FMN, said “globally, there are difficulties in doing business and with this right issue we are able to see how we can reposition the company, re-engineer the financials in such a way that will continue to help us to deliver our objectives and the goals of the company and help us create value for the stakeholders.”