BusinessDay
NigeriaDecides2023

Neimeth holds completion board meeting on N3.67bn Rights Issue

 

Neimeth International Pharmaceuticals Plc has held a Completion Board Meeting to float a Rights Issue of N3.67 billion through the Nigerian capital market. The meeting held on Wednesday July 6, 2022 in Lagos .

The Rights Issue which will commence August 3, 2022 will be used to raise the sum of N3,679,618,625 at the cost of N1.55k per 50 Kobo share.

The shareholders of the company had in March, 2022 at the 63rd Annual General Meeting (AGM) approved the creation of 2,373,947,500 additional Ordinary Shares which will be allotted at the rate of five new shares for every four shares currently held in the company.

Ambrosie Orjiako Chairman of the Board said the money is being raised to construct a new multi products facility that will be tailored to comply with the Word Health Organization (WHO) current standards of Good Manufacturing Practice (c GMP) at Amawbia in Anambra State r ..It is also to be used to support the company’s strategic plan of maintaining a sustainable capital structure, leverage the company’s balance sheet, reduce cost of borrowing or finance costs and fund working capital.

Matthew Azoji, Managing Director/CEO said the capital market is the most viable and cheaper option to source long term funds because of the high cost of funds through other sources. “We cannot finance such long term project as the new plant in Amawbia with short term funds from banks. That will not be expedient and cost effective. ”

Last year, the shareholders had approved a two-pronged expansion plan , namely the construction of a new plant in Anambra State and a facility upgrade of the Oregun plant.The Oregun factory upgrade is already close to completion with funds from the Bank of Industry (BOI) and own resources. On completion, the Oregun plant alone will add additional 300 per cent to the company’s production capacity .

Read also: Group to hold 7th national conference to deepen women awareness on IT

Orjiako said these projects will not only sustain the current upbeat performance of the company but will give her a quantum leap into the league of leading global health care commodities producers.

The fortunes of Neimeth has taken an upward turn since 2018 when it returned to profitablity after nearly a decade of predominantly losses. From a loss of N404.9 million in 2017 the Company made profit of N166.4 million in 2018, N304.4 million in 2019, N297.3 million in 2020 at the upsurge of COVID pandemic and N365.2 million in 2021. Orjiako said the Board is working with Management to ensure that the growth trajectory is sustained.

Neimeth has emerged from an era of constant losses to a period of steady growth in both turnover and profitability. In the past three years the company has built a regime of growth and profitability. In the 2018/2019 and 2019/2020 business years the company recorded growth in both turnover and profit after ten years .
Following the same growth trajectory, the share price of Neimeth increased 343 per cent from 40 kobo as at September 30, 2019 to N1.77 as at March 14, 2022. Between 2012 and 2021 the Earnings Per Share of Neimeth grew 280 per cent from negative 5kobo to 14 kobo per share,. The ability of the Company to create wealth for shareholders has been applauded by industry and market watchers and regulators.

In 2019 Azoji, was named among Nigeria’s top 25 CEOs on account of the wealth creation ability of the Company. And in 2021 the company was rewarded with the award of the Nigerian Investor Value Awards as the Best Performing Stock (Healthcare) in the Nigerian capital market on account of the value it created for shareholders through capital gains. The NIVA Award celebrates public companies that have created sustainable value through strategic intelligence, operating efficiencies, market leadership and organizational values for investors. It celebrates the wealth building capabilities of quoted companies in Nigeria.

Also in 2021 Neimeth was nominated along with Airtel West Africa Plc and FBN Holdings Plc for the Award of the listed company of the year. These were meant for companies that attained high level earnings for investors in this case over 300 per cent.

Only recently in May 2022 President Muhammad Buhari honoured Azoji with the National Productivity Order of Merit (NPOM) Award for his hardwork and excellence in piloting the affairs of the company to attain greater productivity.

The Company has equally transited from non dividend payment which lasted for a decade to one of consistent payment of dividend to shareholders. In 2020 it applied its profits to restructure its balance sheet and returned to dividend payment in 2021. In that year it paid a dividend of 6.5 Kobo for every 50 Kobo share and in 2022 this was increased by 8 per cent to give shareholders 7kobo for every 50 Kobo share held in the Company.

Neimeth shareholders have expressed confidence in the ability of the company to create wealth for them through dividend payment and capital gains..

Azoji is optimistic that Neimeth shareholders will take their rights in the Rights Issue and that the offer will be fully subscribed

Get real time updates directly on you device, subscribe now.