Flour Mills Nigeria Plc will ask its shareholders to approve that a sum of N40 billion should be raised via rights issue. The company has fixed an Extra Ordinary General Meeting for Wednesday 15th July 2015 at 12 noon.
The company will increase its Authorised Share Capital of the Company from N2,000,000,000 (Two billion Naira) to N2,500,000,000 (Two Billion, Five Hundred Million Naira) by the creation of additional 1,000,000,000 (One Billion) ordinary shares of 50 kobo each ranking par; passu with the existing ordinary shares of the Company
If the rights take place it will be the third in 10 years and second in just three years by the company, leading beleaguered shareholders to wonder just when all this sacrifice will turn out to be returns someday.
Flour Mills currently has a debt to equity ratio of 2 to 1 with over N165 billion in debts as at December 2014. It obviously will want to use the cash to defray some of its debt. The company share price closed flat at N35 per share on Tuesday.
The company shares has been down more than half in the last one year and has lost about 11% in value accretion year to date.