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May & Baker Plc wants to increase its share capital to ₦3 billion, even as it plans to proceed with a proposed dividend payment of ₦196 million to its shareholders; translating to 20 kobo per share.

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The company and its shareholders will meet on Thursday, May 31st during its 67th Annual General Meeting to (among other things) consider the possibility of doing the following-

  • Increase its capital: “That the authorised share capital of the Company be and is hereby increased to N3,000,000,000 (Three Billion Naira) by the creation of 2,200,000,000 (Two Billion Two Hundred Million) ordinary shares of 50 kobo each ranking in all respects pari passu with the existing ordinary shares of the Company.”
  • Sell its Property: “That the Board be and is hereby authorized to sell or lease as the Board may deem fit any one of the Company’s two properties located at 3/5 Sapara Street, Ikeja, Lagos on the terms and conditions determined by the Board.”

Other issues to be deliberated at the AGM according to information contained in a public notice as issued today to the NSE  include-

  • Deliberations on the company’s 2017 financial report
  • The election of directors
  • The election of audit committee members
  • Declaration of dividend
  • The approval of remuneration for auditors, etc.

Analysing May & Baker’s plan to raise capital and pay dividends at the same time

It is rather interesting, yet puzzling that May & Baker Plc would even consider proceeding with dividend payment even when it is in apparent need of capital. Recall that the company had earlier this year sold its food line to Dufil, a move the company said was necessary towards availing it the opportunity to access the much-needed capital towards the actualisation of its refocused business model.

Why is the company considering to either lease its properties or even sell them completely off, yet it is not considering ploughing back the proposed ₦196 million into the business?

Maybe May & Baker is more concerned about pleasing its shareholders than it is about actually raising capital and sustaining its business.

Standard chartered

Note that any truly concerned shareholder would understand the need to suspend dividend and plough profit back into sustaining a business when the need for that arises.

In the meantime, we shall wait and see the outcome of this AGM.

Standard chartered

May & Baker was founded in 1944 and it is one of Nigeria’s foremost companies and the first in the pharmaceutical industry. Its shares are listed on the Nigerian Stock Exchange, and they traded at ₦2.66 during today’s NSE session.





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