May & Baker realises ₦1.86 billion from rights issue, to become 76.04 pct successful
The Nigerian Stock Exchange (NSE) has listed additional 745,234,886 ordinary shares of May & Baker Nigeria Plc issued by way of a Rights Issue.
Specifically, the additional shares arose from company’s Rights Issue of 980,000,000 ordinary shares of 50 kobo each at ₦2.50 per share on the basis of one new ordinary shares for every one shares ordinary shares held as at 4 September 2018.
The company realised about ₦1.86 billion from the right issue as it was 76.04 per cent successful.
The application had opened on Monday October 22, 2018 and to closed on Wednesday November 28, 2018.
During the offer, the Managing Director/CEO of May & Baker, Mr. Nnamdi Okafor, had urged shareholders to take advantage of the rights issue and position themselves in order to be able to reap the full benefits of their investments in the company.
He had said right issue would further help to reduce finance costs, increase capacity and bring greater returns to shareholders.
Citing the third quarter results and growth outlook of the healthcare company, Okafor said recent strategic investments and new growth initiatives being undertaken by the company would boost returns in the years ahead.
He said the company would pay dividend on the new ordinary shares to be issued through the rights issue, despite the fact that the net proceeds of the rights issue will be received towards the end of current business year.
Okafor said while the impact of the recapitalisation will become visible in the 2019 business year, the company will pay dividend for the 2018 business year on the old and new shares to be issued.
He said the net proceeds of the rights issue will be invested in some key projects including ₦400 million to finance part of the company’s equity in Biovaccines Nigeria Limited, the joint venture company for local vaccine production and over ₦500 million on capacity expansion for one of its cash cow products, paracetamol for which it is building a dedicated plant. He added that the company will also use ₦400 million to offset part of its current loan portfolio of ₦950 million while ₦500 million will be invested in marketing and brand building.
“We derive our confidence mainly from the pedigree, performance track records and strategic plans of the company which we believe should appeal to all discerning investors.
“The new funds will be used to strengthen their investments and make the company more profitable,” Okafor said.