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Shareholders Approve N3 Billion Capital Issue for May & Baker

May 26, 2014

Bamidele Ogunwusi

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.

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.

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Source: AllAfrica

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