Vono Products Plc has concluded plans to raise N840m from the Nigerian capital market.

The company, in a statement made available to our correspondent on Monday, noted that the amount would be raised by way of Rights Issue.

It explained that part of the funds would be used by the company to strengthen its operations and pursue expansion programmes.

According to the statement, the company is raising N840m through a proposed Rights Issue of 525 million ordinary shares of N0.50 each at N1.60 per share.

The Managing Director of the company, Mrs. Titilola Bakare, who was quoted in the statement as speaking during a Completion Board Meeting held last week, explained that the offer was spurred by the need to strengthen and expand its activities and ensure improved returns on investment to its shareholders.

She also expressed the hope that the company was set to return to profitability by the end of the current financial year. She said the company had been faced with the challenge of a depleted working capital, which adversely affected its production capacity and effective distribution of products.

According to her, proceeds from the recapitalisation exercise will be used to upgrade the factory, buy new plants and machinery and boost its working capital, among others. She added that this line of action would eliminate the company’s dependence on banks for funding to finance its operations.

She said, “The brand is strong and the products are eye-catching and attractive to everyone; people want it. What we just need is getting it right, making it available to everyone.”

Commenting on its prospect of returning to profitability, Bakare said the company had been able to reduce its loss considerably and would, hopefully, bounce back to profitability by the end of the 2012 financial year.

She said, “The turnover figure for the year ended, 2010 was N430m. For 2011, we ended the year at about N600m, representing about 62 per cent increase in our turnover, even though we are still maintaining a loss position. We are happy to inform our stakeholders that our loss position has reduced considerably from about N300m to about N100m in the last one year.

Vono is already on the way to bouncing back to profitability and we are looking at this year as the turnaround year for profit. It is after profit that we will start talking about dividends for our shareholders.”

According to her, the company’s products for the health and educational sectors will record significant improvement in the current year, going by the plans of the federal and state governments to increase their support and undertake major health and educational projects.

Source: Punch/Udeme Ekwere