Portland Paints and Products Nigeria (PPPN) Plc has launched a new capital issue process aimed at raising N1.98 billion new equity funds from existing shareholders.
A regulatory filing at the NSE indicated that PPPN, a subsidiary of UAC of Nigeria (UACN) Plc, plans to issue 600 million ordinary shares of 50 kobo each to existing shareholders at N3.30 per share. The rights’ shares will be allotted on the basis of three new ordinary shares for every two ordinary shares held as at the close of business on February 9, 2016.
Shareholders of the company had at the annual general meeting last year approved the rights issue as part of efforts to deleverage the company and enhance its production capacity.
Chairman, Portland Paints and Products Nigeria (PPPN) Plc, Mr. Larry Ettah, said the net proceeds from the rights issue would be used to reduce existing loans from banks and also to improve plants and equipment of the company.
According to him, as the company makes efforts to improve returns, there is need to address the high leverage position of the company in addition to implementation of other business expansion plans.
“We want to improve the way we run this company. If plants and equipments are running well, the cost of sale will reduce and we will be able to pay dividend next year. We already borrowed about N700 million and we intend to raise money to reduce our burden,” Ettah said.
He said that the company is being repositioned for improved performance noting that the company is currently realigning its portfolio and making strategic shifts where necessary while continuing to focus on innovation and seek opportunities to introduce new offerings into its portfolio of brands.
Key extracts of the audited report and accounts for the year ended December 31, 2014 showed that profit after tax rose by 159 per cent from N57.3 million in 2013 to N148.6 million in 2014.
Operational profit also grew from N174.3 million in 2013 to N304.5 million. Source: Nation Online