Neimeth International Pharmaceuticals Plc has concluded its completion Board Meeting to float a Rights Issue of N3.67 billion through the Nigerian capital market (NCM), starting August 3, 2022.
According to the company, the Rights Issue will be used to raise the sum of N3.67 billion at the price of N1.55 per 50 kobo share.
The shareholders of the company had in March, 2022 at its 63rd Annual General Meeting (AGM) approved the creation of 2.37 billion additional Ordinary Shares which will be allotted at the rate of five new shares for every four shares currently held in the company.
Dr. Ambrosie Orjiako, Chairman of the Board said the money is being raised to construct a new multi products facility tailored to comply with the Word Health Organisation (WHO) current standards of Good Manufacturing Practice (c GMP) at Amawbia in Anambra State.
“It is also to be used to support the company’s strategic plan of maintaining a sustainable capital structure, leverage the company’s balance sheet, reduce cost of borrowing or finance costs and fund working capital. These projects will not only sustain the current upbeat performance of the company but will give her a quantum leap into the league of leading global health care commodities producers”, Orjiako had said.
Speaking during the meeting which held in Lagos, the Chief Executive Officer, Neimeth Pharmaceuticals Plc, Pharm 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 a long term project as the new plant in Amawbia with short term funds from banks. That will not be expedient and cost effective”, he said.
Azoji thereafter expressed optimism that Neimeth shareholders will take their rights in the Rights Issue and that the offer will be fully subscribed.
Last year, the shareholders had approved a two-pronged expansion plan namely the construction of a new plant in Anambra State and a facility upgrade of the Oregun plant. The Oregun factory upgrade is already close to completion with funds from the Bank of Industry (BOI) and own resources. On completion, the Oregun plant alone will add an additional 300 per cent to the company’s production capacity.
The fortunes of Neimeth have 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 in 2021.
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 5 kobo to 14 kobo per share.