By Abimbola Fashakin, Lagos
The Managing Director of May and Baker Plc, Mr Nnamdi Okafor on Tuesday said the company has not abandoned its proposed three billion Naira rights issue aimed at shoring up its working capital.
Okafor, who said this at the company’s 2016 end of year media parley in Lagos, noted that the rights issue would be floated in the first half of 2017 barring any unforeseen circumstances.
He said that the company had not abandoned the planned capital raising exercise, but was sourcing for technical input, saying, “We have not abandoned the rights issue because we still have a lot of borrowings from banks. We need equity funds and we are still working on it.
“We need money for technical input and we are taking some partners that will bring in technology to have returns for shareholders. And we are looking forward to doing something in this regard by the first half of next year.’’
The company had in 2014 announced plans to raise the sum of three billion naira through rights issue and private placement to shore up working capital.
Okafor said that the recapitalisation when concluded would enable the company to shore up working capital to compete strongly in the market place and deliver value to shareholders.
Speaking on the economic headwinds in the country, he stated that the company had not been able to access official foreign exchange allocation in the last six months.
“Some of the letter of credits (LCs) we opened as far back as the fourth quarter of 2015 have been funded by the banks.
Consequently, we are incurring huge exchange rate losses for 2016 and these will likely impact our bottom-line at the end of the year,” Okafor said.
According to him, it has been a herculean task running any business in Nigeria, especially import dependent manufacturing businesses.
He explained that access to foreign exchange to buy raw and other input materials was greatly hampered by inability of manufactures to source forex through the official window.
Okafor said that most factories that were still standing would be forced to close down if the forex challenges linger till 2017.
He noted that things would normalise in the economy with proper handling of the Niger-Delta crisis and rise in crude oil price.
Okafor, however, said that the company’s third quarter revenue increased by about 13 per cent over the previous year.
“We have continued to take advantage of improved production capacity and better cost management to mitigate the tough operating environment.
“Our results in 2016 have consistently shown improvement in major fundamentals, a trend which started in the last quarter of 2014 and significantly improved in 2015,’’ Okafor added.
The managing director noted that the company would continue to invest in human capital development through training and re-orientation and motivational schemes.