Reports in The Nation Newspaper suggest May & Baker is planning to raise between N2billion and N3billion in new equity to defray its crushing debts. The funds is expected to be used to repay its loans which as at end of 2013 was about N3.5billion. The company’s loans is about 1.6x its net assets and cost them about N631million in 2013 alone. Finance cost for May & Baker is also 1.5x its operating profit (without other income) and has an average cost of about 17.6%.
May and Baker posted a loss after tax of N103million in 2013 largely as a result of its high finance cost. So this is a welcome development.
