NIGERIA – Shareholders of Flour Mills of Nigeria Plc have endorsed plan by the company to raise N40 billion through a rights issue to existing shareholders.
The Chairman of Flour Mills, Mr. John Coumantaros, explained at an extraordinary general meeting in Lagos, on Wednesday, that the fund would help the company reduce its debt burden, lower its interest charges as well as to augment its working capital.
Furthermore, he said with the proceeds of the rights issue, Flour Mills would be strongly positioned to pursue high growth business opportunities without straining its liquidity. He said the company currently employs 6,000 workers and has created a lot of employment for Nigerians.
“The foreign exchange market is getting tough and we have to find ways to manufacture locally. We are undertaking a very big investment programme,” he said.
The shareholders also approved the resolution authorising the directors to increase the company’s authorised share capital from its current N2 billion to N2.5 billion.
“You will recall that during the last five years, Flour Mills had embarked on a major expansion programme in our core food, agro allied, logistics and support businesses. We also undertook done strategic acquisitions and mergers.
These were aimed at strengthening, consolidating, re-focusing and supporting our core food business,” the chairman said.
He listed some of the investments that had been undertaken by Flour Mills to include the inauguration of a new sugar refinery at Apapa; the development of a 10,000 hectare sugar estate and mill in Sunti, Niger state; an ultra modern pasta factory at Agbara, Ogun state, among others.
“Most of these projects are now operational and making steady and impressive progress. Your directors are therefore optimistic that the project will deliver good returns, positive cash flow and continue to make appreciable contributions to Flour Mills top line and bottom line growth in the coming years.
“Unfortunately, this period of strategic expansion has coincided with the sudden slump in global crude oil prices from November 2014 which resulted in major devaluation of the naira and caused increases in our import costs and financial charges,”Coumantaros said in a speech to shareholders.