Berger Paints Plc has begun its rights issue offer to raise N543m from its existing shareholders.

The company, in a statement on Wednesday, announced that it was offering 72.5 million ordinary shares of 50k each at N7.50 per share to its existing shareholders across the country following the completion board meeting held in Lagos recently.

It added that the rights were being offered on the basis of one new share for every three held by members as at May 31, 2013.

The net proceeds of the offer, which amounts to N543.42m, will enable the paint and allied company to finance the modernisation of its manufacturing operations.

The Chairman, Berger Paints Nigeria Plc, Mr. Clement Olowokande, said the net proceeds of the rights issue estimated at N521.71m would be used to finance the modernisation of the company’s factory operations.

He added that the modernisation was the main thrust of a strategic plan to ensure that the company continued to operate at the forefront of paint technology by replacing its aging manufacturing infrastructure, adding that this would lead to improved efficiency that will positively impact on turnover and profitability.

Olowokande said the company planned to invest in projects that would bring about major improvements in its distribution channels.

He said, “The company has taken several initiatives and entered new partnerships that will greatly enhance its products and services in the Nigerian paint and coating industry in the period ahead.

“We have been the standard-setter in the industry with enviable records of pioneering wide range of popular special products, and we are confident that the company will record significant growth and improvement in its operations in the years ahead in order to create better value for shareholders.

“We experienced several cases of fraud the previous year, which had a negative impact on our performance, and which led to the appointment of forensic auditors to investigate suspected fraud cases on the company’s stocks in our depots as well as suspected fraud cases regarding the company’s debtors.”

He also stated that the company had put measures in place to ensure that shareholders reaped increased returns in the coming years, adding that the company intended to put all its resources into active use.

Source: Punch (by Udeme Ekwere)