Flour Mills of Nigeria begins raising US$194m in rights issue

NIGERIA – Flour Mills of Nigeria has announced it would commence the process of raising additional capital through the rights issue and medium term notes (MTN).

The company, following high bank charges, had been paying on borrowings, which drove costs of finance upwards for many years,

It has authorised directors to raise up to US$110 million equivalent in local currency.

The directors in July 2016 had however put the right issue on hold and had planned to raise the funds later 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.

According to This Day, the directors had already registered the N40-billion (US$110 million) 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.

The company also notified the Nigerian Stock Exchange that plans were already in progress towards possibility of starting the process, and that the exact amount to be raised would be confirmed in due course.

The company also affirmed that it had begun discussions with stakeholders such as financial advisers, legal advisers and issuing houses to determine the right time and cost for raising N70 billion (US$194 million) through medium term notes (MTN).

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