Directors and professional parties yesterday formally endorsed the offer documents for the N3.67 billion rights issue by Neimeth International Pharmaceuticals Plc, concluding the pre-offer documentations and processes.
At the completion board meeting yesterday at Radisson Hotel, Ikeja, Lagos, parties to the offer signed off the documents, a ceremony that signals final endorsement to open application list for the offer.
Neimeth is offering 2.374 billion ordinary shares of 50 kobo each to existing shareholders at N1.55 per share. The rights issue was pre-allotted to existing shareholders on the basis of five new shares for every four shares currently held. Application list for the rights issue opens on August 3, 2022.
Shareholders of the company had in March, this year at the 63rd annual general meeting (AGM) approved the creation of about 2.374 billion additional ordinary shares which would be allotted at the rate of five new shares for every four shares currently held in the company.
Chairman, Neimeth International Pharmaceuticals Plc, Dr. Ambrosie Orjiako, said the company was raising funds two key reasons of constructing a world-class factory compliant to World Health Organisation (WHO) current Standards of Good Manufacturing Practice (cGMP) at Amawbia in Anambra State and to boost its working capital.
He said the projects will not only sustain the current upbeat performance of the company but will give it a quantum leap into the league of leading global health care commodities producers.
He noted that the fortune of Neimeth has taken an upward turn since 2018 when it returned to profitability after nearly a decade of predominantly losses. From a loss of N404.9 million in 2017 the company made profit of N166.4 million in 2018, N304.4 million in 2019, N297.3 million in 2020 at the upsurge of COVID pandemic and N365.2 million last year.
Orjiako assured that the company is working to ensure that the growth trajectory is sustained.
Managing Director, Neimeth International Pharmaceuticals Plc, Matthew Azoji, said the capital market is the most viable and cheaper option to source long term funds because of the high cost of funds through other sources.
“We cannot finance such long term project as the new plant in Amawbia with short term funds from banks. That will not be expedient and cost effective,” Azoji said.
He recalled that in the immediate past year, shareholders had approved a two-pronged expansion plan, including the construction of a new plant in Anambra State and a facility upgrade of the Oregun plant.
He explained that the Oregun factory upgrade is already close to completion with funds from the Bank of Industry (BOI) and internal capital noting that on completion, the Oregun plant alone will add additional 300 per cent to the company’s production capacity.
Azoji expressed optimism that shareholders will take their rights and the offer will be fully subscribed.
He outlined that Neimeth has emerged from an era of constant losses to a period of steady growth in both turnover and profitability.
According to him, in the past three years the company has built a regime of growth and profitability as it recorded growth in both turnover and profit in 2019 and 2020 after 10 years of low performance.
Following the same growth trajectory, the share price of Neimeth increased 343 per cent from 40 kobo as at September 30, 2019 to N1.77 as at March 14, 2022. Between 2012 and 2021 the Earnings Per Share of Neimeth grew 280 per cent from negative 5kobo to 14 kobo per share,. The ability of the company to create wealth for shareholders has been applauded by industry and market watchers and regulators.
In 2019 Azoji, was named among Nigeria’s top 25 CEOs on account of the wealth creation ability of the Company. And in 2021 the company was rewarded with the award of the Nigerian Investor Value Awards as the Best Performing Stock (Healthcare) in the Nigerian capital market on account of the value it created for shareholders through capital gains. The NIVA Award celebrates public companies that have created sustainable value through strategic intelligence, operating efficiencies, market leadership and organizational values for investors. It celebrates the wealth building capabilities of quoted companies in Nigeria.
Also in 2021 Neimeth was nominated along with Airtel West Africa Plc and FBN Holdings Plc for the Award of the listed company of the year. This was meant for companies that attained high level earnings for investors in this case over 300 per cent.
In May 2022, President Muhammad Buhari honoured Azoji with the National Productivity Order of Merit (NPOM) Award for his hardwork and excellence in piloting the affairs of the company to attain greater productivity.
The company has equally transited from non dividend payment which lasted for a decade to one of consistent payment of dividend to shareholders. In 2020 it applied its profits to restructure its balance sheet and returned to dividend payment in 2021. In that year it paid a dividend of 6.5 Kobo and in 2022 this was increased by eight per cent to 7.0 kobo per share.