Meyer Plc, a manufacturer of paint products in the country have reached an agreement with the Assets Management Company of Nigeria (AMCON) on a loan restructuring plan for the company.
Kayode Falowo, Chairman, Meyer Plc, disclosed this at the company’s Annual Generral Meeting (AGM) in Lagos, recently.
In its 2017 financial statements the company acknowledged taking a loan facility from AMCON which it defaulted in repayment. The implication of this is that the loan may be called in at the discretion of AMCON.
In his words:
“We have reached a mutually beneficial compromise and in due course, it will be fully resolved. The waiver granted us in the AMCON loan will be reflected in 2018 financial report.”
Falowo revealed that the company recorded a 0.5 percent increase in its gross revenue from N1.091 billion in 2016 to N1.097 billion in 2017 noting that the company recorded a net loss of N264.8 million in 2017, as against N215.8 million in 2016.
He announced the completion of the company’s plans to raise funds through a rights issue in 2017, ThisDay Newspaper reported.
In his words:
“The 2017 right issue of a total 291,489,840 shares at 75 kobo each was completed with 70.75 percent success amounting to N154.67 million.
“A total of 85,252,117 ordinary shares representing 29.25 percent of the subscribed portion of the right issue were canceled and reverted to the unissued shares of Meyers Plc.”
He further added that with a negative working capital of N992.74 million, the capacity utilisation of the company in 2017 dropped to 21 percent of the installed capacity leaving 79 percent of idle to be financed, therefore he noted that the company was unable to meet its orders as at when due.
Fawolo expressed optimism that the company will benefit from the full implementation of the Auto Industry Development Policy (AIDP) in the country.
In his words:
“The implementation of the Auto Industry Development Policy (AIDP) which portends increased sales for our Auto-refinishes has not taken off with the anticipated momentum.
“There is renewed INTEREST that government will intensify this in 2018 and we are assured of a share of the market.”
Recall that the Federal Government of Nigeria in 2013 approved the New Automotive Industry Development Plan (NAIDP) to transform the Nigerian automotive industry and attract investment into the sector.
Following the harsh operating environment and the economic contraction, Meyer Plc, (formerly DN Meyer Plc) has since 2016 continued in a state of despondency in terms of earnings. The company also could not sustain the heat of intense competition in the market.
Hopes that the company will revert back to profitability in the current year seem to have been dashed as it began 2018 on a loss after tax of N61.289 million for the first quarter ended March 31, 2018, as against a loss after tax of N64.980 million in 2017. The company’s revenue also dropped by 6.66 percent to N244.501 million from N261.944 million a year earlier.
Meyer Plc, formerly DN Meyer Plc, was incorporated in Nigeria in 1960. The name was changed to Meyer Plc in 2016. It manufactures and market paint products.
