Cement, Healthcare Companies to Raise N240b New Capital

capital market
  • Cement, Healthcare Companies to Raise N240b New Capital

The country’s largest cement and healthcare manufacturing companies are planning to raise N240 billion new capital to grow their businesses.

The two largest cement companies – Dangote Cement Plc and Lafarge Africa Plc – and two leading healthcare companies – Fidson Healthcare Plc and May & Baker Nigeria Plc – have launched the new capital raisers. They are expected to conclude the supplementary issue by the fourth quarter of the year.

Dangote Cement, Nigeria’s most capitalised quoted company and Africa’s largest cement producer, is raising N150 billion in debt capital.

The company has concluded the first tranche of the N150billion, raising N50 billion in new debt capital.Dangote Cement issued commercial papers of 180 days and 270 days’tenors with effective yields of 13.21 per cent and 13.96 per cent.

According to the company, the net proceeds from the deal would be used to finance capital expenditure, working capital and corporate purposes.

Lafarge Africa Board has also approved a right issue of up to N82 billion to reduce the company’s leverage as well as strengthen its profitability.

Earlier, Lafarge Africa shareholders approved a resolution authorising the company to raise more capital of up to N100 billion as the cement group continues to optimise its balance sheet.

Lafarge Cement shareholders mandated the Board to raise more capital through an offer of debt or equity or a combination of the two from local or international capital market. Last year, the cement company raised N131.6 billion from a rights issue, which was oversubscribed.

Fidson Healthcare is raising N4.5 billion new capital from new ordinary shares to its shareholders.

The Nigerian Stock Exchange (NSE) has approved the rights issue, paving the way for the company to open application list for the offer.

Fidson Healthcare will issue 900 million ordinary shares of 50 kobo each to shareholders at N5 per share. The rights issue will be pre-allotted on the basis of three new ordinary shares for every five ordinary shares held as at the close of business on July 5.

Shareholders of Fidson Healthcare last year approved a plan to raise N6 billion to boost its working capital and support its expansion. Shareholders had authorised the board of directors of Fidson Healthcare to “raise further capital of up to N6 billion through an offer whether by way of public offering, rights issue, private and special placement of shares”.

Shareholders also authorised the directors to absorb oversubscription and to convert existing loans due to any person from the company towards payment for any rights or shares subscribed for. Shareholders increased the authorised share capital from N1.2 billion to N1.5 billion by the creating more 600 million shares of 50 kobo each.

Fidson Healthcare Plc Chairman, Mr. Felix Ohiwerei, said the new capital would be used to boost working capital that had been negatively impacted by the depreciation of Naira.

He noted that the company’s new factory had come on stream and that it needed more capital to realise the full potential and utilise the new factory to full capacity.

Sources confirmed that May & Baker Nigeria has advanced discussions on its much-awaited rights issue.

Its shareholders earlier this year voted to increase the company’s share capital from N1.9 billion of 3.8 billion ordinary shares of 50 kobo each to N3 billion of six billion ordinary shares of 50 kobo each. It has a subsisting shareholders’ approval to raise N3.2 billion.

Earlier this year, May & Baker Nigeria Chairman Lt.-Gen. Theophilus Danjuma (rtd), told shareholders that company’s directors believe that the time was right to raise the funds to enable the company harness new opportunities.

“Therefore, our rights issue will soon open and I hope shareholders will take up their rights to support our company in achieving its new vision. We shall all reap the rewards in the immediate future and beyond,” Danjuma said.

About the Author

Samed Olukoya
CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya; Email: [email protected]

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