WEDNESDAY, 11 AUGUST 2010 BY TAIWO HASSAN 

 

Flour Mills of Nigeria Plc has unfolded plans to raise to N70 billion from the Nigerian capital market for its expansion projects.The company’s chairman, Alhaji Ahmed Joda, who unveiled the fund raising plan at the extra-ordinary general meeting in Lagos yesterday, said   the board considered the move as the best option in the face of the prevailing situation in the country.

 

According to him, “at this particular point in time in the development of our country, this is the best way. Interest rate has been a major factor, and we (the board of Directors) think this is the only solution now.”The chairman added that the board called for the meeting with the shareholders to intimate them of the bond the company was planning to raise from the capital market.

 

The fund raising, through bond, he said, was subject to approval of the Securities of Exchange and Commission (SEC).Joda explained that a debt issuance programme would be established “by way of a shelf registration of up to N70 billion for the purpose of issuing corporate bonds by way of a public offering, placing rights offering, book building process or any other method in such tranches, series or proportions, at such coupon rates within such maturity periods, and on such other terms and condition including the provision of security for repayment, as the Directors may deem fit or determine, subject to obtaining approvals of the regulatory authorities.”

 

Similarly, the company’s Group Managing Director, Emmanuel Ukpabi said that the move to float the bond was borne out some constraints facing the company, beside the need to expand its portfolios.According to him, power supply and infrastructure have been the major factors besetting the company’s operations.He said the company has been generating its own electricity, which he considered a   burden to the organisation’s revenue.

 

According to him, the need to independently generate electricity was because of the precarious state of the nation’s power sector.He however stressed that the company plans to go into food processing and some other businesses, so as to shore up the company’s operational base.

 

Source:Guardian