Flour Mills of Nigeria Plc has announced the full subscription of its ₦39.9 billion rights issue.
In a regulatory report to the Nigerian Stock Exchange (NSE) the company indicated that a total of 1.476 billion ordinary shares of 50 kobo each were listed as additional shares in Flour Mills of Nigeria’s name. The additional shares came from the ₦39.9 billion rights issue.
With the supplementary listing, the total issued and fully paid up shares of Flour Mills of Nigeria now stands at 4.10 billion ordinary shares of 50 kobo each. The listing paved the way for trading on the supplementary shares.
Recall that the company had in a notice sent to the Nigeria Stock exchange signify its intention to raise additional equity funds up to ₦40 billion in right issue.
The implication of the new fund
Chairman, Flour Mills, Mr. John Coumantaros, 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.
Also, the success of the new capital raising is expected to place the flour mills group in a better position to strengthen its balance sheet and support business growth and expansion drive.
It recently announced a strategic investment in a fertilizer Blending Plant and also a bid for silo complexes from the Federal Ministry of Agriculture and Rural Development.
Flour Mills of Nigeria’s 9-month financial statement result for the year ended 31st December 2017 shows a 9.6% rise in revenue from ₦389.9 billion in Q3 2016 to ₦427.5 billion in Q3 2017.
The profit before tax also grew by 89.5% from ₦10.3 billion in Q3 2016 to ₦19.5 billion in Q3 2017. Its share price closed at ₦35.20 on the stock exchange last weekend.
Also recently, the company commissioned its Sunti Golden Sugar Estates located in Mokwa Niger State with 100,000 tonnes capacity sugar processing plant.
Flour Mills of Nigeria Plc (FMN) was incorporated on 29 September 1960 as a private limited liability company converted to a public company in November 1978.
The group is primarily engaged in flour milling; production of pasta, noodles, edible oil and refined sugar; production of livestock feeds; farming and other agro-allied activities; distribution and sales of fertilizer; manufacturing and marketing of laminated woven polypropylene sacks and flexible packaging materials.