Flour Mills of Nigeria to issue US$55.16m medium term bonds

NIGERIA – Flour Mills of Nigeria Plc, a diversified Nigerian agribusiness company has announced its plan to issue a N20 billion (US$55.16m) medium-term bonds, which is subject to appropriate pricing.

In a statement to the Nigerian Stock Exchange, the maker of Golden Penny spaghetti said that the proposed issuances are expected to be senior unsecured fixed-rate bonds.

The statement further to disclose that the bonds would have tenors of three years and five years, respectively.

The latest issuance is part of Flour Mill’s previously approved N70 billion (US$193m) issue programme.

The company said it had begun the process of getting the needed approval from the Securities and Exchange Commission so that the issuance could take effect.

Flour Mills intends to use the proceeds from the bond issuance to refinance its existing short-term debt, increase the efficiency of its balance sheet and ultimately increase the wealth of the company’s shareholders.

Last year the integrated food company set out its strategies to ensure its continuous growth in key segments, deliver improved margins and operational efficiencies which will in turn result in higher profitability.

The key areas targeted were the continuous implementation of turnaround initiatives in the business, accelerated expansion in the business-to-consumer segment, optimal operation of supply chain and further balance sheet management.

This saw, the company receive approval from its shareholders to merge five of its subsidiaries with its holding company under a Scheme of External Restructuring which will lead to higher profit and additional value to the entire group.

The merger involved; Golden Noodles Nigeria Limited, Golden Transport Company Limited, FMN Cement Industries (Nigeria) Limited, New Horizon Flour Mills Limited and Quilvest Properties Limited with Flour Mills of Nigeria Plc.

This was followed by the Thai Farm International Limited, subsidiary of Flour Mills of Nigeria Plc, changing its corporate name to Premium Cassava Products Limited.

Flour Mills of Nigeria Plc is the most-capitalised flour manufacturing company on the Nigerian Stock Exchange, following the acquisition and eventual delisting of Dangote Flour Mills Plc.  The company’s market capitalisation stands at N94.3 billion (US$260.1m).

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