Pharmaceutical firm, Fidson Healthcare Plc has listed more shares on the Nigerian Stock Exchange (NSE). The company disclosed that the additional shares were listed by way of a Rights Issue, however, the targeted capital was not raised.
Fidson listed 586,360,250 million Ordinary Shares on Monday, July 1, 2019. This additional shares listed, according to a statement sent to the Exchange, arose from Fidson Healthcare’s Rights Issue of 750,000,000 ordinary shares of 50 kobo each at N4.00 per share on the basis of 1 new ordinary share for every 2 ordinary shares held as at December 28 2018.
Rights issue which is also known as rights offer gives existing shareholders of a company an opportunity or right to increase their shares by purchasing new shares. This enables existing shareholders to buy shares at a discount to the market price.
Fidson was only able to raise 78.18% of what the company expected to raise. This makes the total issued and fully paid up shares of Fidson Healthcare to increase to 2,086,360,250 ordinary shares from 1,500,000,000 after the additional 586,360,250 ordinary shares. Nairametrics learnt the company raised N2.3 billion falling short of its N3 billion target.
Although the company didn’t reveal its reasons and purpose for raising the fund, it is believed that Fidson intends to utilise the capital for operations, as it prepares to receive a major business portfolio from GlaxoSmithKline.
Fidson, a prepared choice for GSK: Nairametrics had reported that GlaxoSmithKline Consumer Nigeria Plc has chosen Fidson as its preferred local contract manufacturing partner. GSK will thus transition the manufacturing of its respiratory and wellness products to Fidson from the third quarter of 2021. The firm, however, maintained that activities would continue at its Agbara plant till then.
Prior to this, GSK had early in April, issued a notice stating it would shut down its production facility in Agbara by the third quarter of 2021. The move, according to the firm would enable the company to focus on building “a more sustainable commercial business”.
Note: Fidson Healthcare grew its revenue for Financial Year 2018 by 15.45% after hitting N16.23 billion from the N14.06 billion the company recorded within the same period in 2017. Fidson has however, been tipped for further growth by Meristem, with revenue projection for 2019 financial year expected to peak by 18.89% to reach N19.30 billion.
The operating expenses took a different twist, declining by 4.02% to settle at N4.52 billion from N4.71 billion.
Fidson is currently trading at N4.55 kobo per share on the stock market after falling from N5.05 on July 3, 2019.