Flour Mills of Nigeria plans to sell shares via a rights issue to cut debt as it registers a ₦70 billion ($223 million) bond programme to refinance short-term loans, the firm said on Wednesday.
Several Nigerian companies have tapped capital markets this year to shore up their balance sheets after a currency crisis in 2015 dragged the country’s economy into recession and stoked inflation, frustrating businesses and consumers.
Nigeria’s economy has since recovered, but growth is fragile and although Flour Mills expects consumer activity to pick up, it said confidence was only slowly improving, with personal incomes under pressure and not keeping pace with inflation.
Flour Mills Plc, which has interests in food manufacturing, agro-business, packaging and logistics, said it was in the process of concluding the timing and size of the share sale.
“We are now looking at going to the market,” Jacques Vauthier, chief finance officer, told an analysts call. He said directors will meet soon to decide on the offer size.
Flour Mills registered plans with regulators to raise up to ₦40 billion in equity over a three year period and obtained approval from shareholders last year to sell shares, but weak capital markets delayed its launch.