Shareholders of May & Baker Nigeria Plc have only three days to take up their rights and increase their stake in the pharmaceutical manufacturing firm.
The company is raising N2.45 billion in new equity funds through a rights issue of 980 million shares of 50 kobo each at N2.50 per share to existing shareholders.
While application list had opened on Monday October 22, 2018 and is scheduled to close on Wednesday November 28, 2018, there are no indications on possible extension of the application period.
As the closure date approaches, the Managing Director, May & Baker Nigeria Plc, Mr. Nnamdi Okafor, has urged shareholders to take advantage of the rights issue and position themselves in order to be able to reap the full benefits of their investments in the company.
Citing the third quarter results and growth outlook of the healthcare company, Okafor said recent strategic investments and new growth initiatives being undertaken by the company would boost returns in the years ahead.
He said the company would pay dividend on the new ordinary shares to be issued through the rights issue, despite the fact that the net proceeds of the rights issue will be received towards the end of current business year.
Okafor said while the impact of the recapitalisation will become visible in the 2019 business year, the company will pay dividend for the 2018 business year on the old and new shares to be issued.
He said the net proceeds of the rights issue will be invested in some key projects including N400 million to finance part of the company’s equity in Biovaccines Nigeria Limited, the joint venture company for local vaccine production and over N500 million on capacity expansion for one of its cash cow products, paracetamol for which it is building a dedicated plant. He added that the company will also use N400 million to offset part of its current loan portfolio of N950 million while N500 million will be invested in marketing and brand building.
“We derive our confidence mainly from the pedigree, performance track records and strategic plans of the company which we believe should appeal to all discerning investors. The new funds will be used to strengthen their investments and make the company more profitable,” Okafor said.