The shareholders of FTN Cocoa Processors Plc have given their consent to a proposed plan by the directors of the company to raise a capital of up to N1.4 billion, subject to regulatory approval. This is part of the resolutions reached during the recently concluded Extra-Ordinary General Meeting of the company.
Affirming this, a notice signed by one of the directors of the company, Mr Akin Laoye, and made available on the website of the Nigerian Exchange Limited (NGX) read: ‘’Subject to obtaining the approval of the relevant regulatory authorities, the Board of directors of the Company (the “Board”) be and is hereby authorized to raise capital of up to ₦1,400,000,000 (One Billion Four Hundred Million Naira), on such terms and conditions and at such time, as the Board may deem fit or determine (“the Capital Raise”).’’
According to the disclosure, the capital is to be raised through the combinations of different strategic means, such as; private placement, rights issue, public offering etc. Subject to regulatory approval, the notice stated that;
- The Board will offer shares to its shareholders via a rights issue or any other method approved by the relevant regulatory authorities, in compliance with CAMA 2020.
- The Board will apply amounts outstanding under any convertible loan, shareholder loan or other loan facility due to any person, from the Company, as may be agreed between the person and the Company, towards payment for any shares to be subscribed for and allotted to such person under the rights issue or any other method approved by the relevant regulatory authorities for the offer to the shareholders.
- In a bid to liquidate some of its debt to OH Origins Global Commodities Inc., the firm stated that it will allot shares outstanding from the Capital Raise to the latter on a basis of private placement / debt to equity conversion. The deal will be executed at a price not below the one offered to the shareholders and on such terms and conditions approved by the Board.
- Perhaps the entire capital is not raised by the shareholders and by OH Origins, the Board is at liberty to raise the outstanding capital by way of public offering or any other method(s) or combination of methods such as; issuance of shares, convertible or non-convertible securities, loan notes etc.
- The Board was also charged to exercise its legitimate powers in carrying out actions that will bring the plans into fruition, including but not limited to hiring professional advisers, execute agreements, deeds, notices and other transaction documents, among others.
Back story: Nairametrics had earlier detailed the adverse financial conditions of FTN Cocoa Processors Plc and the efforts it had taken to correct the anomaly. According to the report, the company had been facing financial setbacks since 2014.
True to the observation, the company also reported a half year loss of N689.7 million in its recently released unaudited financial statements for the Half Year period ended June 30, 2021. To this end, the recent approval to raise N1.4billion is a right step towards the right direction with a lot of multiplier impact that can return the company back to its profit ways.
FTN Cocoa Processors Plc closed trading today 12th of August, 2021 with a share price of 40 kobo.
