Fidson Healthcare gets N2.3b equity from shareholders

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Fidson Healthcare Plc has successfully raised about N2.345 billion from its shareholders to recapitalise its operations. The healthcare company had set out to raise N3 billion through a rights issue to existing shareholders, but the offer was undersubscribed by N655 million.

Fidson Healthcare had offered 750 million ordinary shares of 50 kobo each through a rights issue to existing shareholders at N4 per share. The rights issue was pre-allotted on the basis of one new ordinary share for every two ordinary shares held as at December 28, 2018.

Regulatory filing however showed that shareholders subscribed to 586.36 million ordinary shares of 50 kobo each at N4, implying a subscription level of 78.18 per cent. The company has listed the additional shares at the Nigerian Stock Exchange (NSE), thus increasing its outstanding paid up shares from 1.5 billion ordinary shares of 50 kobo each to 2.086 billion ordinary shares of 50 kobo each.

Fidson Healthcare had planned to raise N4.5 billion new equity funds through a rights issue of 900 million ordinary shares of 50 kobo each to existing shareholders at N5 per share. However, the company decided to reduce the offer size and offer price.

Chairman, Fidson Healthcare Plc, Mr. Segun Adebanji, said the net proceeds of the rights issue would be used to refinance some expensive debts, strengthen the working capital position of the business and fund some strategic capital expenditure.

According to him, the capital injection from the rights issue would enable the board and management to reposition the business in order to take advantage of visible growth opportunities.

He praised shareholders for their continued support, assuring that the company has a promising future.

“Together we will continue to reap the bountiful rewards of our investment in the year ahead,” Adebanji said.

Managing Director, Fidson Healthcare Plc, Mr Fidelis Ayebae, said the company would take advantage of the net proceeds from the rights issue to inject fresh working capital into the business in order to maximise the opportunities that exist in the market.

According to him, a revenue growth of over 20 per cent is projected for 2019, with increased focus on growing its ethical product segments. The business development work being done in hospitals to enhance the patronage of Fidson brands is also expected to increase demand.

He said about 20 new products will be introduced into the market in 2019 to take advantage of the available capacity at the new factory.

He added that further cost savings will be generated by directly importing key raw materials, taking advantage of the Central Bank of Nigeria (CBN) window for manufacturers, and renegotiating with its suppliers.

He said the company is also switching its energy source from diesel to gas, noting that Fidson expects that through its cost savings initiatives, to reduce production costs and increase gross margins significantly in 2019.

“The prospects look good for Fidson in the near-term, enabling the company to cement its leadership position in the pharmaceutical industry,” Ayebae said.

Source: THE NATION

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