Following the recently announced rights issue by one of the oldest conglomerates in Nigeria, Unilever Nigeria, the company visited the Nigerian Stock Exchange to explain the reasons why it plans to raise N58, 851,275,010.00. This visit comes after the company announced an impressive result of 58 percent and a jump in net profit by a massive 3873 percent Year-on-Year (YoY) for the second quarter in 2017. It would be recalled that the shareholders of the company approved the rights issue at the 92nd Annual General Meeting held in May 2017.
According to the company, the issue price is N30 per share and a total of 1,961,709,167 ordinary shares of 50 kobo each will be offered to existing shareholders. This will be done on the basis of 14 new ordinary shares for every 27 ordinary shares held by shareholders whose names appeared on the Register of Members and transfer books of Unilever Nigeria Plc as at the close of business on Wednesday, June 28, 2017.
According to Unilever these are the reasons for the right issue
The net proceeds will help the company repay outstanding foreign currency denominated liabilities, purchase additional raw materials required for Unilever’s products. It will also help them meet other working capital requirements in order to build long-term value for all stakeholders.
“Through this rights issue, we will be able to reinforce our financial flexibility to support our growth initiative, while giving shareholders an opportunity to consolidate their shareholding position. The Rights Issue is part of Unilever Nigeria’s long term strategic intent to strengthen the company’s capital base by deleveraging its balance sheet, support its working capital needs and position the company to exploit value accretive opportunities” said Yaw Nsarkoh Managing Director, Unilever Nigeria Plc.
“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 that 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,” said His Royal Majesty Nnaemeka Achebe, the Chairman, Unilever Nigeria Plc.
This is also good news for the Shareholders of Unilever Nigeria Plc as they can now trade their renounced shares for profit at the Nigerian Stock Exchange.