Morison Industries, Consolidated Hallmark Shop for N1.002bn

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Goddy Egene

Morison Industries Plc and Consolidated Hallmark Insurance Plc are set to raise a total of N1.002 billion from existing shareholders through Rights Issues.

Morison Industries Plc, which is into production and marketing of pharmaceuticals, hygiene products, is to raise N502 million by issuing 836,983,125 ordinary shares of 50 kobo each at 60 Kobo per share on the basis of 11 new ordinary shares for every two shares held by the existing shareholders. According to the company, the qualification date for the rights issue is August 205.

Similarly, Consolidated Hallmark Insurance Plc is to raise N500 million via one billion shares of 50 kobo each at 50 kobo per share on the basis of one new share for every six shares already held.
More companies are now raising funds through rights issues since the initial public offering sector has remained dormant for fear of under-subscription.

Currently, Guinness Nigeria Plc and Unilever Nigeria Plc are in the marketing shopping for fresh funds from existing shareholders. While Guinness is raising about N39.70 billion, Unilever is raising N58.851 billion.
Speaking on the rights issue, Managing Director/Chief Executive Officer of Guinness Nigeria, Mr. Peter Ndegwa said it would deleverage the company’s balance sheet and reduce finance costs.

He noted that the company obtained a loan from Diageo in 2016 to manage foreign exchange related obligations, saying that between 2015 and 2016 obtained loan facilities from various financial institutions to fund working capital requirements and business expansion operations.

Ndegwa said: “This rights issue will allow the company to deliver on its strategic objectives and give all our shareholders a unique opportunity to increase their shareholding in the company. Our expectation is that funds raised will help mitigate the impact of increasing finance costs, optimise our balance sheet and improve the company’s financial flexibility.”

Similarly, the MD/CEO of Unilever Nigeria Plc, Mr. Yaw Nsarkoh said:
“The rights issue is part of Unilever Nigeria’s long term strategic intent to strengthen the company’s capital base by deleveraging its balance sheet, support its working capital needs and position the company to exploit value accretive opportunities.”

He explained that the net proceeds would help the company repay outstanding foreign currency denominated liabilities, purchase additional raw materials required for Unilever’s products and to meet other working capital requirements in order to build long term value for all stakeholders.
Nsakorh noted that the rights issue reiterates in the robust future and commitment to building a more enduring business in Nigeria.