By: Bamidele Ogunwusi and Lucy Eazee
Greek conglomerate-Flour Mills of Nigeria hopes to issue N35 billion corporate bonds this month to further expand its products line, establishing a sugar refinery in Lagos.
The issue, which forms part of the N70 billion bond issue programme approved in August by shareholders, will pay between 10 and 12 per cent, according to a report by Bloomberg News, quoting Pabina Yinkere, an analyst at Vetiva Capital Management Limited. The book building for the sales, Flour Mills said in an e-mailed presentation to investors, may be completed this week.
The refinery will have capacity of 750,000 metric tons a year, just as Flour Mills plans to develop a 15,000-hectare (37,000 acres) sugar-cane plantation for completion in 2012, joining Dangote Industries, the nation?s largest domestic investor in the business.
The investment units of United Bank for Africa, Zenith Bank and Guaranty Trust Bank are helping with the sale.
Flour Mills also plans to invest part of the bond proceeds in a new mill that will produce 1,000 metric tons of soft wheat a day and another for the production of 500 metric tons of pasta daily, the company said in the presentation.
Meanwhile, the basic indicators of the Nigerian Stock Exchange (NSE) on Monday, suffered the second consecutive loss since Friday, as equities capitalisation went down by N21.235 billion to close at N8.079 trillion; while the All-Share Index closed at 25,301.34 basis points after it lost 66.49 points or 0.26 per cent.
A total of 29 stocks suffered setbacks, led by food confectioneries giant- Cadbury Nigeria?s 125 kobo; followed by Cement Company of Northern Nigeria, which lost 50 kobo; Nigerian Aviation Handling Company dropped 30 kobo; just like National Salt Company Nigeria; Ashaka Cement followed with 28 kobo; while Union Bank Nigeria was forced 27 kobo kobo down after recording huge gains in the past weeks. Expectation, according to analysts at the weekend was that the share prices of bank could nose-dive as investors rush for the exit.
The expectation of a decline was hinged on the calculation that with the Asset Management Corporation of Nigeria (AMCON) offering 60 per cent of the 60-day average price for stocks in pricing their value, it would be better to exit at current price to get better value than is being offered.
The share price of RT Briscoe also dropped by 19 kobo; Ecobank lost 18 kobo; Oceanic Bank, 17 kobo; while Skye Bank dropped 16 kobo; among others.
A total of 31 companies made it to the gainers? table; while 29 were on the laggards? table, led by Flour Mills and integrated energy giant- Oando?s 25 kobo rise respectively; Vita Foam grabbed 16 kobo; Dangote Sugar Refinery notched 19 kobo; while Custodian and Allied Insurance added 13 kobo. The share price of Bank PHB appreciated by 10 kobo; Prestige Assurance and Berger Paints gained 10 kobo each; Wema Bank gained 8 kobo; while Unity Bank added by 7 kobo; among others.
A total of 254.334 million shares valued at N1.545 billion were traded in 6,185 deals, with the banking sub-sector being the most active, accounting for a total of 178.658 million shares valued at N1.054 billion in 3,674 deals.