By John Okoh, Lagos
The Board and Management of Unilever Nigeria Plc, has disclosed that the company would deploy the proceeds of the ongoing N58 billion right issue which will end by September 8, 2017, to support its working capital as well as re-position the company to exploit value accretive opportunities.
Addressing stockbroking community and financial journalist on the floor of Nigerian Stock Exchange (NSE) in Lagos, the Managing Director Yaw Nsarkoh, said the right issue is part of Unilever Nigeria long-term strategic intents to strengthen the company’s capital base by deleveraging its balance sheet.
He said that part of the proceeds will be used to repay the company’s outstanding foreign currency denominated liabilities, buy additional raw materials required for its products and to meet other working capital requirements.
The right issue price is N30.00 at the ratio of 14 new ordinary shares for every 27 ordinary shares held as at the close of business on Wednesday June 28, 2017. The right issues offer price is 22 percent discount as at the opening date of July 31, 2017.
Further breakdown of how the right issue proceeds will be deployed shows that N38.502 billion will go into the payment of foreign exchange denominated obligations.
The amount set aside for the purchase of raw materials stands at N11.813 billion, while N7.365 billion is for working capital.
Already the parent body of Unilever Nigeria has assured that they will take up their right issue.
According to the right issue time table the listing of new Unilever Nigeria shares / trading will commence on November 1, 2017.
A look at the company’s second quarter result for the period ended June 30, 2017 shows that revenue grew by 40 percent while profit after tax grew by 236 percent, boosted by strong revenue performance and effective cost management initiatives.