By Ademola Alawiye

Monday, 13 Dec 2010

Flour Mills of Nigeria Plc has announced the successful conclusion of its N37.5bn Series 1 fixed rate senior unsecured bond issue.

At the Completion Board Meeting held by the company on Friday, a total of N49.8bn bids were received from a varied composition of investors.

The company had targeted an initial issue amount of N35bn but it accepted bids up to 12 per cent for a total amount of N37.5bn.

Speaking at the meeting in Lagos, the Group Managing Director, Flour Mills, Dr. Emmanuel Ukpabi, said, “We, the management of Flour Mills, are extremely pleased with the outcome of this transaction, and the benefits it provides to the Flour Mills Group expansion plans.

“We take this opportunity to express our appreciation also for the fantastic job done by our advisors – UBA Capital Limited, Guaranty Trust Bank Plc and Zenith Capital Limited – in putting the transaction together.”

The Group Treasury Director, Flour Mills, Mr. Vlassis Liakouris, said, “With the advent of this bond issue and inclusion of long-term debt in our capital structure, the working capital adequacy and financial flexibility of the company is greatly improved. The benefits of our expansion will, no doubt, also significantly enhance our already strong and robust cash flow generating capacity.”

He noted that the company had successfully diversified its funding base to include non-bank institutional investors.

Representing the lead issuing house, UBA Capital, and the joint issuing houses on the transaction, GTBank and Zenith Capital, the Managing Director, UBA Capital, Mr. Amadou Hott, said, ”This transaction is arguably the largest ever local currency corporate bond issue to date in West Africa, and a significant milestone for the Nigerian capital markets. The tight pricing level of 12 per cent achieved also demonstrates the confidence investors place in the credibility of the issuer.”

He added, ”Overall, we are also pleased to observe the positive impact of the recent tax incentives introduced by the Federal Government in respect of corporate bonds.”

An application has been made for the bonds to be listed on the Nigerian Stock Exchange.

 

Source: Punch