May & Baker Nigeria plc has reiterated commitment to float its proposed three billion Naira rights issue aimed at shoring up working capital for the company.
Nnamdi Okafor, Managing Director, May & Baker Nigeria Plc, expressed this commitment at the company’s 2016 end of year media parley in Lagos, noting that the rights issue would be floated in the first half of 2017 barring any unforeseen circumstances.
He said that the company had not abandoned the planned capital raising exercise, but was sourcing for technical input.
“We have not abandoned the rights issue because we still have a lot of borrowings from banks. We need equity funds and we are still working on it.
“We need money for technical input and we are taking some partners that will bring in technology to have returns for shareholders.
“And we are looking forward to doing something in this regard by the first half of next year,” Okafor said.
The News Agency of Nigeria (NAN) reports that the company had in 2014 announced plans to raise the sum of three billion naira through rights issue and private placement to shore up working capital.
Okafor said that the recapitalisation when concluded would enable the company to shore up working capital to compete strongly in the market place and deliver value to shareholders.
The company’s shares closed at 90kobo on Tuesday when the announcement was made, shedding 2 kobo in 13 trades with a volume of 375,711 valued at N342,334.67.
The three billion rights issue, if followed through, will see the company strive for increased share of listed healthcare companies, including Afrik pharmaceuticals plc., Ekocorp plc., Evans medical plc., Fidson healthcare plc, Glaxo smithkline consumer Nig. Plc., Morison industries plc., Neimeth international pharmaceuticals plc, Nigeria-german chemicals plc., Pharma-deko plc., and Union diagnostic & clinical services plc.
Okafor had also expressed concern over economic headwinds in the country, which he says has seen the company unable to access official foreign exchange allocation in the last six months.
The situation, according to him, results in the company incurring huge exchange rate losses for 2016 and these will likely impact on its bottom-line at the end of the year.
It was not all gloom, as he expressed optimism that things would normalise in the economy with proper handling of the Niger-Delta crisis and rise in crude oil price.
Okafor also noted that the company’s third quarter revenue increased by about 13 per cent year on year.
“We have continued to take advantage of improved production capacity and better cost management to mitigate the tough operating environment.
“Our results in 2016 have consistently shown improvement in major fundamentals, a trend which started in the last quarter of 2014 and significantly improved in 2015,’’ Okafor added.
CALEB OJEWALE WITH AGENCY REORTS
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