By PETER EGWUATU & Michael Eboh
The Board of Directors of Berger Paints Nigeria Plc, regulators and professional parties have unanimously endorsed the proposed N543.42 million rights issue by the company.
The endorsement was made at the completion Board Meeting held at Berger Paints headquarters in Lagos last week.
Mmbers of the board of directors, issuing houses to the rights issue, stockbrokers to the issue and other parties signed the final documents of the rights issue in the presence of officials of Securities and Exchange Commission (SEC) and Nigerian Stock Exchange (NSE).
The completion board meeting paved the way for the opening of application list for the rights issue on August 20, 2013. Berger Paints is offering about 72.46 million ordinary shares of 50 kobo each to existing shareholders at N7.50. Berger Paints opens today at the stock market at N9.61 per share.
The rights issue was pre-allotted on the basis of one new ordinary share for every three ordinary shares held as at May 31, 2013. Chairman, Berger Paints Nigeria Plc, Mr. Clement Olowokande, said the net proceeds of the rights issue estimated at N521.71 million would be used to finance the modernisation of the company’s factory operations.
According to the Chairman, “modernization was the main thrust of a strategic plan to ensure that the company continues to operate at the forefront of paint technology by replacing its aging manufacturing infrastructure.”
He said the modernisation of the company’s factory operations would lead to improved efficiency that will positively impact on turnover and profitability.
He outlined that the net proceeds would be used to purchase and install water-based plant and solvent-based plant from Spain.
Olowokande said that the company also plans to commit substantial investments on major improvements of its distribution channels.
He said the company has taken several initiatives and entered new partnership that would greatly enhance its products and services in the Nigerian paint and coating industry in the period ahead.
He noted that Berger Paints has always been the standard-setter in the industry with enviable records of pioneering wide range of popular special products.
He said he was confident the company would record significant growth and improvements in its operations in the years ahead in order to create better value for shareholders.