Portland Paints and Products Nigeria, PPPN Plc has launched a new capital issue process aimed at raising N1.98 billion new equity funds from existing shareholders.
A regulatory filing at the weekend indicated that PPPN, a subsidiary of UAC of Nigeria (UACN) Plc, plans to issue 600 million ordinary shares of 50 kobo each to existing shareholders at N3.30 per share.
The rights’ shares will be allotted on the basis of three new ordinary shares for every two ordinary shares held as at the close of business on February 9, 2016.
Shareholders of the company had at the annual general meeting last year approved the rights issue as part of efforts to deleverage the company and enhance its production capacity.
Chairman, Portland Paints and Products Nigeria (PPPN) Plc, Mr. Larry Ettah, said the net proceeds from the rights issue would be used to reduce existing loans from banks and also to improve plants and equipment of the company.
He said as the company makes efforts to improve returns, there is need to address the high leverage position of the company in addition to implementation of other business expansion plans.
“We want to improve the way we run this company. If plants and equipments are running well, the cost of sale will reduce and we will be able to pay dividend next year.
We already borrowed about N700 million and we intend to raise money to reduce our burden,” Ettah said.
