THE proposed N58billion rights issue by Unilever Nigeria Plc has generated a lot of excitement amongst market watchers, who have expressed optimism that the offering has the potential to further deepen the nation’s capital market.
The company had on Thursday presented facts behind its plans to raise N58, 851,275,010.00 on the floor of the Nigerian Stock Exchange in Lagos.
A total of 1,961,709,167 ordinary shares of 50 kobo each will be offered to existing shareholders on the basis of 14 new ordinary shares for every 27 ordinary shares held by shareholders whose names appeared on the Register of Members and transfer books of Unilever Nigeria Plc as at the close of business on Wednesday, June 28, 2017. The issue price is N30 per share.
“Through this rights issue, we will be able to reinforce our financial flexibility to support our growth initiative, while giving shareholders an opportunity to consolidate their shareholding position. The rights issue is part of Unilever Nigeria’s long term strategic intent to strengthen the company’s capital base by deleveraging its balance sheet, support its working capital needs and position the company to exploit value creation opportunities,” said Yaw Nsarkoh Managing Director, Unilever Nigeria Plc.
Echoing similar sentiments, the Chairman, Unilever Nigeria Plc, His Royal Majesty Nnaemeka Achebe, stated that the rights issue represents a milestone event in Unilever Nigeria’s history as it marks the company’s first follow-on equity offering since its listing in 1973.
According to Achebe, “the rights issue reiterates our confidence in Unilever Nigeria’s robust future and commitment to building a more enduring business in Nigeria. We acknowledge with deep appreciation the unwavering support we have received from our stakeholders and shareholders even in trying times which has enabled us deliver positive results. We urge all shareholders to support the company’s objective by participating in the rights issue to ensure the company obtains the flexibility to attain its growth objectives.”
The offer which opened on Monday July 31, 2017 will close on Friday September 08, 2017 while Stanbic IBTC Capital Limited serves as the issuing house.
On reasons for the rights issue, Unilever explained that the net proceeds will help the company repay outstanding foreign currency denominated liabilities, purchase additional raw materials required for Unilever’s products and to meet other working capital requirements in order to build long term value for all stakeholders.
It would be recalled that the shareholders of the company approved the rights issue at the 92nd Annual General Meeting held in May, 2017.