Notore moves to curtail currency risk, plans N30 bln fresh capital
By Samuel Bankole
Notore Chemical Industries, fertilizer and agro-allied firm plans to raise N30 billion fresh capital to boost working capital and finance the completion of the ongoing Turn Around Maintainance (TAM) of its plants.
The fresh capital raise has been authorised by the shareholders of the company at its last general meeting, according to a regulatory filing by Notore with the Nigerian Stock Exchange (NSE).
The company said the fund could be raised through a public offering, special placement, right issue or any other methods.
The authorization by shareholders also includes raising the money through the issuance of shares, convertible or non-convertible securities, loan notes, bonds and/or any other instruments.
“In the event that the Company raises the additional capital by way of a rights issue, any shares not taken up by the existing Shareholders within the stipulated period, be determined and offered to interested Shareholders of the Company and where the rights issue is underwritten, the Shareholders also waive their pre-emptive rights to enable the Underwriter(s) take up any unsubscribed shares,” the company said in the filing.
Sources, however, told Global Financial Digest that part of the new capital raise may be deployed by the company to pay off part of a 7-year tenured loan of $37 million obtained from the African Export-Import Bank to finance the ongoing Turn Around Maintenance (TAM) of its plants due to minimize currency risk of the company’s capital.
In May, the company said it “embarked on a TAM programme of its production Plant and Equipment to improve its reliability and increase production output.”
The company said the TAM is expected to be completed by the fourth quarter of this year and it would lead to the significant improvement of its Plant’s reliability and production output to meet and sustain its 500,000MT per annum design nameplate capacity.
Many companies listed on the stock exchange have been raising fresh money to increase working capital and pay off high interest money market debt.
MTN Nigeria, Dangote Cement, United Capital and FCMB are among companies that have raised funds through the issuance of commercial paper since the beginning of the year.
The CBN had twice this year adjusted the exchange rate downward in a bid to conserve available dollar and curb pressure on the foreign exchange reserves.
However, in spite of the two devaluations of the naira at the official market this year, the CBN had been unable to meet domestic demand for the dollars from importers and even the offshore portfolio investors wanting to take out their money from the country.#GFD