Sunday, 19 July 2015

FLOUR MILLS’ SHAREHOLDERS ENDORSE RAISING N40 BILLION

Information at the disposal of Tectono Business Review has it that shareholders of Flour Mills of Nigeria Plc have approved bid by the company to raise N40 billion through a rights issue.

During an extraordinary general meeting in Lagos which was held a few days ago, the chairman of the company, Mr. John Coumantaros, explained, that the fund would help the company reduce its debt burden, interest charges as well as augment its working capital. He made it clear that with the proceeds of the rights issue, Flour Mills would be strongly positioned to pursue high growth business opportunities without straining its liquidity. According to him, the company currently employs 6,000 workers and has created a lot of employment opportunities for Nigerians.

Mr. Coumantros added: “The foreign exchange market is getting tough and we have to find ways to manufacture locally. We are undertaking a very big investment programme.”

Tectono Business Review also learnt that the shareholders approved the resolution mandating the directors to increase the company’s authorised share capital from its current N2 billion to N2.5 billion.

Mr. Coumantros also said: “You will recall that during the last five years, Flour Mills had embarked on a major expansion programme in our core food, agro allied, logistics and support businesses. We also undertook done strategic acquisitions and mergers. These were aimed at strengthening, consolidating, re-focusing and supporting our core food business.”

He highlighted a few of the investments that had been undertaken by the company. They include:

·         The inauguration of a new sugar refinery at Apapa.
·         The development of a 10,000 hectare sugar estate and mill in Sunti, Niger state.
·         An ultra-modern pasta factory at Agbara, Ogun state.

In his speech to the shareholders, the Flour Mill boss said: “Most of these projects are now operational and making steady and impressive progress. Your directors are therefore optimistic that the project will deliver good returns, positive cash flow and continue to make appreciable contributions to Flour Mills top line and bottom line growth in the coming years. Unfortunately, this period of strategic expansion has coincided with the sudden slump in global crude oil prices from November 2014 which resulted in major devaluation of the naira and caused increases in our import costs and financial charges.”