Vitafoam Nigeria Plc in a notice to the Nigerian Stock Exchange has announced it has secured a N2 billion loan from the Bank of Industry (BOI). Proceeds from the loan will be used to augment its working capital. The loan has a tenure of five years and attracts 12% interest with one year moratorium on principal.
Benefits of the loan
The loan will enable the company obtain raw materials directly from suppliers, rather than third parties. The company will also have significant savings from lower interest rates and flexible repayment terms.
Update on subsidiaries
Vitaparts Nigeria limited, a new subsidiary established to manufacture oil filters is expected to commence operations in the 3rd quarter of the current financial year. Importation and Installation of the plant is expected to be completed in the second half of the year.
Vitabloom Nigeria Limited has completed the installation of fibre processing plant. The new production line is expected to boost the operation and revenue of the group.
Vitafoam closed at N3.37 in todays trading session on the NSE. Vitafoam recently released its results for the financial year ended September 2017. Revenue increased by 30% from N13.5 billion in 2016 to N17.6 billion in 2017. Profit before tax dropped from N61 million in 2016 to N16 million in 2017.
The Bank of Industry Limited (BOI) was reconstructed in 2001 out of the Nigerian Industrial Development Bank (NIDB) Limited, which was incorporated in 1964.
The Bank’s mandate includes the provision of financial assistance for the establishment of large, medium and small projects as well as expansion, diversification and modernization of existing enterprises; and rehabilitation of ailing industries. The Bank also manages dedicated funds and through its subsidiaries, provides business advisory services, trusteeship, leasing, insurance brokerage, etc.