By Ademola Alawiye

Monday, 29 Nov 2010

Flour Mills of Nigeria Plc has announced the commencement of book building for its N35bn Series 1 Senior Unsecured Bond Issue under a N70bn debt issuance programme.

According to a statement released by the company, the book building commenced following clearance received from the Securities and Exchange Commission.

The statement added that the book building process would span a period of four business days, between November 29 and December 2, 2010.

It said, ”Flour Mills is looking to raise a target issue amount of N35bn in respect of the first tranche, at an indicative coupon range between 10 per cent and 12 per cent. The purpose of the capital raising is to refinance existing loans, provide funds for future investments in capital projects aimed at enhancing capacity of the food business, as well as augmenting the company‘s working capital.”

The bonds will be issued on a fixed-rate basis, for a nominal tenor of five years. The coupon is payable every six months, whereas the principal repayment will be amortised from beginning of the third year until final maturity.

The statement further said that prospective investors were to submit bids to UBA Capital Limited, Guaranty Trust Bank Plc and Zenith Capital Limited or any named placement agents.

The statement added, “Flour Mills was incorporated in Nigeria in September 1960 and, currently, operates one of the largest single-site mills in the world with a rated capacity of 6,200 metric tonnes of wheat per day. Flour Mills is listed on the Nigerian Stock Exchange, with a market capitalisation of N135bn and over 68,000 shareholders as at October 31, 2010.”

Source: Punch