By Nkiruka Nnorom
Unilever Nigeria Plc has said that its on-going Rights Issue will help it to reinforce financial flexibility in order to support its growth initiative and also give the shareholders of the company the opportunity to consolidate their shareholding position.
The Managing Director, Yaw Nsarkoh, made the remark at the company’s Fact Behind the Rights Issue presentation on the Nigerian Stock Exchange, NSE.
Unilever Nigeria is presently raising N58.9 billion through Rights Issue to its existing shareholders. The company is offering 1.96 billion ordinary shares of 50 kobo each at N30 per share on the basis of 14 new ordinary shares for every 27 ordinary shares held by shareholders as at Wednesday, June 28, 2017.
The rights issue is among others being executed by some multinational companies in Nigeria to which some sections of shareholders alleged would be prelude to an orchestrated share float shortfalls that would eventually lead to voluntary or statutory delisting of the companies.
Addressing stockbrokers at the event, Nasrkoh said that the Rights Issue is part of Unilever Nigeria’s long term strategic intent to strengthen its capital base by deleveraging its balance sheet, support its working capital needs and position the company to exploit value accretive opportunities.
He stated that the net proceeds of the offer would help the company to repay outstanding foreign currency denominated liabilities, purchase additional raw materials required for Unilever’s products and meet other working capital requirements in order to build long term value for all stakeholders.
In his remark, His Royal Majesty Nnaemeka Achebe, Chairman, Unilever Nigeria Plc, 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.
He stated: “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.