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Vitafoam shareholders endorse N4bn capital raising

By on September 7, 2013

SHAREHOLDERS of Vitafoam Nigeria Plc have given approval to the Board of Directors of the company to raise additional N4 billion capital to enhance its operations.

The shareholders on Wednesday at the company’s Extra Ordinary General Meeting, EGM, unanimously approved that the company can raise the sum by issuing securities such as equities or debt via public offering, rights issue, debenture, special placing and other options or combination of any of these methods and offering same for sale on such terms and conditions as the directors may deem fit in the interest of the company subject to the approval of the relevant regulatory authorities.

Other resolution approved by shareholders include: That the directors be authorirised to make supplementary allotment of securities issued in the event of oversubscription, and that the directors be further authorised to enter into and execute any agreements, deeds, instruments, notices, and other documents pursuant to the resolutions including appointment of professionals parties.

Meanwhile, the Managing Director, Vitafoam, Mr. Joel Ajiga, who spoke to newsmen said, “I am delighted that the shareholders gave their approval for the company to raise additional fund. They understand the potentials inherent in the company and ripple effect it will have on the stakeholders. On the method of raising the fund, we are planning a right issue in the first instance, which will be one for one ordinary share. We hope the existing shareholders will pick their rights because they are supporting the offering.’

On the issue of bonus and dividend being demanded by shareholders, he said,” We will give bonus based on performance. This is the essence why we want to raise the capital to improve productivity and in turn improve the bottom line that will make the company declare higher dividend in the future.

The Chairman of Vitafoam, Dr. Bamidele Makanjuola, assured shareholders at the EGM that the company will strive to improve on its dividend payment. According to him, “Most of the money the company earns go to the banks in form of higher interest expenses. So, that is why the company had decided to put a stop on banks’ borrowing and go into long term borrowing from the capital market. We will revisit the bonus issue based on performance.”

Specifically, Mr. Boniface Okezie, Chairman, Progressive Shareholders Association of Nigeria, PSAN, Mr. Owolabi Peter and Gabriel Adebayo, all shareholders, who spoke at the meeting, commended the board and management of the company on its decision to raise additional capital said “Proactive measures should be taken to reward shareholders in terms of bonus issue and dividend payment.”