Flour Mills of Nigeria (FMN) Plc on Tuesday said it would commence process of raising additional capital through Rights Issue and Medium Term Notes(MTN).
Following the high bank charges FMN was paying on borrowings, which drove costs of finance upwards for many years, shareholders of the company, in 2015 authorised the directors to raise up to N40billion of additional equity via a Rights Issue.
However, the directors in July 2016 put the right issue on hold and planned to later raise the funds in three tranches. According to the directors, given the economic headwinds, they decided to undertake the Rights Issue through a Shelf programme (a situation whereby securities are sold over a period of time) to enable the company raise the required funds in several transactions over three year period.
The directors said they have already registered a N40 billion Shelf Programme with the Securities and Exchange Commission (SEC), adding that they would continue to assess the economic climate to determine the most appropriate time to launch the first tranche.
However, in a notification to the Nigerian Stock Exchange (NSE), yesterday, FMN said it would commence with the activities to raise the funds through the Rights Issue and MTN.
According to the company, plans are now in progress towards the possibility of commencing with the first tranche of through the Rights Issue. However, the company said the exact amount to be raised in the first tranche would be confirmed in due course.
Additionally, the company has also revealed plans to raise up to N70 billion through MTN. The company affirmed that it has commenced discussions with stakeholders such as financial advisers, legal advisers and issuing houses to determine the right time and cost for issuing such financial instruments which will eventually be duly registered with proper financial bodies.
Meanwhile, NSE All-Share Index climbed 1.41 per cent on Monday to hit a six-week high at 36,831.93 after its biggest listed firm Dangote Cement and some consumer goods companies gained.
The main share index rose for the fourth straight day on Monday to near 37,000 points, a level it last reached in August. According to market operators, foreign investors and pension funds have been buying shares since September ahead of third quarter earning season due to start this month.
A total of 27 stocks appreciated as against 22 stocks that depreciated. May & Baker Nigeria Plc led the gainers with 7.6 per cent, trailed by International Breweries Plc and Sterling Bank Plc with 5.0 per cent apiece. Total Nigeria Plc and FMN chalked up 4.9 per cent each.