Culled—Proshare

October 9, 2018/Arthur Steven Asset Management Research

Thank you for your interest in Flour Mills of Nigeria Plc (“FMN” or the “Company”) Bond Issuance of up to N30 billion across two tenors –  (i) a 3-year (“Series 1”), (ii) a 5-year (“Series 2”),  (collectively referred to as “the Issuance”) under its N70 billion Bond Issuance Programme. 

Following the initially communicated offer period, the order book has gained strong momentum and the offer is being extended until Tuesday evening, 9 October, 2018 to accommodate any last minute bids.

In over its five-decade history, FMN has been notable for:

1. Strong Brand & Reputation – Golden Penny continues to be one of the best known and the preferred brand amongst bakers, confectioneries and consumers in Nigeria

1. Strong Industry Leadership – The quality of its products and services as well as its support initiatives has led to dominant market position

1. Experienced & Stable Management Team – The Senior management team has vast local and international experience in the consumer sector. Most of the members of the senior management team have been in the Flour Mills Group for more than 10 years

1. Strong Corporate Governance Practices – Sound governance, risk management and compliance culture in adherence to international best practices

1. Sustained Positive Financial Trajectory – FMN has continued to thrive in recent years, recording decent performance despite the macro-economic headwinds and challenges faced in Nigeria’s consumer goods market

 FMN will use the proceeds of the proposed Bond Issuance to restructure its debt profile by substituting short term debt with longer termed financing and also support its working capital requirements.

The proposed fund raising is in line with the Company’s long-term strategic plans and follows the Rights Issue earlier in the year where FMN raised N40 billion to:

1. a)      strengthenthe Company’s capitalbase by deleveraging its balance sheet;
2. b)      support its working capital needs;
3. c)       position the Company to exploit value-accretive opportunities; and
4. d)      give the Company greater operational and financial flexibility to ensure business growth and continuity.

Please find below for your perusal a summary of the terms of the offer:

The under listed documents are attached herewith:

1.         Shelf Prospectus
2.         Series 1 & 2 Pricing Supplements

    iii.         PENCOM Compliance Certificate

1.        GCR Indicative Issue Ratings
2.       Agusto Indicative Issue Ratings