Air Liquide Nigeria to embark on N2.1bn rights issue program
Air Liquide Nigeria Plc, a listed entity on NASD OTC platform, is offering subscription for a Rights Issue of 414 million units of ordinary shares of 50 kobo each at N5 per share, on the basis of 23 new shares for every 10 units held as of October 15, 2019.
The company in a circular said the net issue proceeds estimated at N2.01 billion after deducting issue costs of N50.30 million, representing 2.43 percent of the gross issue proceeds would be used to pay down its debt obligations and finance capital expenditure and working capital requirements.
The offer which opened on November 4 would close on November 29, 2019.
Debt obligations include repayment of intercompany bridge loan facility, settlement of foreign currency supplier liabilities, part payment for the purchase, installation, and maintenance of the new Air Separation Unit, repayment of bank overdraft, working capital requirements.
As at the date of this rights circular, the company had an outstanding debt balance of N1.2 billion as follows: N854 million intercompany bridge loan facility from Air Liquide Finance and N300 million bank over-draft from United Bank of Africa Plc.
According to Sunday Afolabi, Chairman, Air Liquide Nigeria, the rights issue will enable the company to strengthen its capital base to support business growth and exploit value-accretive opportunities whilst giving Air Liquide Nigeria greater financial flexibility.
Rights issue is an invitation by a company to existing shareholders to purchase additional new shares in the company.
Cash-strapped companies can turn to rights issues to raise money when they really need it. However, shareholders are not obligated to exercise this right.
In a rights offering, each shareholder receives the right to purchase a pro-rata allocation of additional shares at a specific price and within a specific period (usually 16 to 30 days).
The subscription price at which each share may be purchased is generally discounted relative to the current market price.
Air Liquide Nigeria is a leading supplier of industrial, specialty and medical gases in Nigeria, incorporated in 1960 as a private limited liability company, trading under the name, Port Harcourt Gas Producers Limited until 29 June 1966 when the Company’s name was changed to Gas Producers Limited. The Company commissioned its first plant at Okehi Street Port Harcourt, in 1960.
Air Liquide Nigeria is a subsidiary of Air Liquide Group, which holds a 61.11percent equity stake in the company through Air Liquide Afrique S.A. Air Liquide Group is the world leader in gas technologies and services for the healthcare sector and industrial space.