By Michael Eboh
Nigerian Aviation Handling Company (NAHCO) Plc has announced its plans to raise N5 billion via a bond issue to pursue its business diversification and growth plans.
Speaking at a forum in Lagos, heralding its forthcoming annual general meeting, Managing Director of the company, Mr. Bates Sule stated that the bond which will be raised in two tranches of N2 billion and N3 billion, before the end of the second half of the year and before the end of its current financial year,Â will be used in its expansion drive and also to strengthen its existing core business.
He assured stakeholders of the company of a judicious utilisation of proceeds from the bond issue, adding that funds from the bond issue will be used to reposition and strengthen the company to overcome the challenges of competition.
He said, â€œThe company is planning to raise N5 billion from the bond market before the end of the second half of the year and before our current financial year.
The bond issue will be done in two tranches of N2 billion and N3 billion.
â€œWe are committed to resourcefulness, we intend to use the fund to be gotten from the bond issue judiciously. The fund will be used to pursue our diversification enhancement agenda.
Sule said that the company, which is targeting a turnover of N7.5 billion in its current financial year, is planning to invest over N800 million in the replacement of its ground handling support equipment and other facilities.
He noted that the company invested over N1.7 billion in the replacement of ground handling equipment between 2007 and 2009 and has drawn up a plan to ensure the gradual replacement of its equipments and facilities in the next couple of months.
He explained that the business transformation agenda of the company, which started since 2007 and lasted till 2009, has begun to yield positive fruit, as it recorded significant improvement in its operational activities last year and in the current financial year.
According to Sule, the plan ensured that its cargo handling services contribute about 57 per cent to its total turnover, while it has upgraded its Information Technology (IT) infrastructure, simplifying its processes and making it to be monitored easily.
â€œOur operating results for the year ended, December 31, 2009 as approved by Nigerian Stock Exchange (NSE) represent a significant improvement in all performance indicators over the previous year.
â€œWith turnover at N6.0 billion, the company achieved a 37 per cent increase from the N4.4 billion recorded in 2008. Similarly, profit before tax, which stands at N1.8 billion, represents a 56 per cent increase over the N1.2 billion recorded in 2008 while profit after tax also grew by 55 per cent from N802 million in 2008 to N1.2 billion 2009,â€ he said.