Shareholders of May & Baker Nigeria Plc have authorised the directors of the healthcare company to raise up to N3 billion in new equity fund with a view to reducing dependence on loans and strengthen the company’s balance sheet.
At the annual general meeting in Lagos, 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.
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, by creating additional 1.80 billion ordinary shares of 50 kobo each. May & Baker currently has 980 million issued shares outstanding on the Nigerian Stock Exchange (NSE).
There are indications that the company may opt for rights issue, giving assurances from shareholders that they will support the recapitalisation exercise. The company is also favourably disposed to new major investor with technical experience and know-how to optimize its potential.
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.
Responding to shareholders’ questions and remarks, managing director, May & Baker Nigeria Plc, Mr. Nnamdi Okafor, said the company’s fundamentals have shown appreciable improvements as reflected by rising sales and improving cash flow.
He assured that the company has a bright future as it has been able to build strong institutions and brands that will ensure sustainable growth irrespective of changes in management and operating environment.
According to him, with the expected certification of the company’s products and processes by the World Health Organization (WHO), the company is set to become the first in Nigeria to be certified by the global health organisation, with immense potential for greater global opportunities and increased earnings.
He added that the WHO certification would highlight the leading position of May & Baker in the healthcare industry and provide opportunities to grow returns to shareholders.
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