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Shareholders approve N3bn capital issue for May & Baker

By on May 27, 2014

Shareholders of May & Baker Nigeria Plc have authorised the directors of the company to raise up to N3 billion in new equity fund.

The Shareholders gave the nod at the healthcare company’s annual general meeting (AGM) held in Lagos.

The shareholders unanimously authorise the board of directors “to raise additional equity capital of an amount up to N3 billion or any fraction thereof either locally and or internationally through any or a combination of rights issue, private placement and public offer.”

The meeting also empowered the directors to decide on absorption of excess monies from the new capital issue with a view to reducing dependence on loans and strengthen the company’s balance sheet.

The resolution highlighted that the new capital issue would be for the “purposes of enhancing the company’s working capital and financing the development of the company’s businesses.”

To create headroom for the new capital issue, shareholders also increased the authorised share capital of the company from N1 billion, consisting of 2.0 billion ordinary shares of 50 kobo each, to N1.90 billion, consisting of 3.8 billion ordinary shares of 50 kobo each.

In his address to shareholders, Chairman, May & Baker Nigeria Plc, Lt. Gen. Theophilus Danjuma (rtd), said the recapitalisation is an important measure to reduce the company’s current high debt-to-equity ratio and the resultant high financing costs.

According to him, it is imperative that shareholders inject more equity to the company to make it stronger and put it in better position to face the challenges in the industry.

He outlined that the management of the company has been implementing measures to improve the performance of the company and deliver returns to shareholders.

“These measures include strategies to sustain revenue growth through more aggressive marketing and product development initiatives, better management of working capital and aggressive reduction in overhead costs,” Danjuma said.

He noted that the consolidation of all pharmaceutical manufacturing operations of the company at its PharmaCentre in Ota would help to improve operational efficiency and capacity utilisation while curtailing excess overhead costs.

 

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