Neimeth targets N5bn from rights issue, private placement for expansion projects
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Neimeth International Pharmaceuticals Plc has disclosed arrangements to raise N5 billion through a hybrid offer of rights issue and private placement from investors in the Nigerian capital market.
The rights issue, set to commence August 3, 2022, would be used to raise the sum of N3.679 billion at the cost of N1.55 per 50 kobo share.
Meanwhile, the private placement will commence immediately after the rights issue has closed. The company expects to generate N1.320 billion by offering 628.753 million ordinary shares to would-be investors at the price of N2.10.
To facilitate the rights Issue, the pharmaceutical giant had in March 2022 created 2,373,947,500 additional ordinary shares which will be allotted at the rate of five new shares for every four shares currently held in the company to existing shareholders.
The company said the capital gathered will be used for a two-pronged expansion plan including the construction of a new plant in Anambra State and a facility upgrade of the Oregun plant in Lagos.
“The new plant will be a multi-product facility that will be tailored to comply with the World Health Organization (WHO) current standards of Good Manufacturing Practice (cGMP) at Amawbia in Anambra State.
“Part of the funds will also 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,” the company stated.
Also, the Oregun factory upgrade, already close to completion with funds from the Bank of Industry (BOI) and the company’s resources, is expected to add an additional 300 percent to the company’s production capacity especially with liquid preparations.
Commenting on the capital sourcing, Matthew Azoji, managing director/CEO of Neimeth, said the company has approached the Nigerian Capital Market to raise funds to ensure realisation of its vision and strategic expansion plans.
Azoji described the capital market as one of the most viable and cost-effective sources of long-term funds considering the high cost of funds through other sources, such as debt.
The managing director further noted that the company is pioneering research and development into African home-grown solutions to various diseases, adding that it has many therapeutic formulations that will provide solutions to various human and animal diseases.
“Neimeth is also partnering with overseas pharmaceutical companies to formulate medicaments for various common ailments on the continent. Currently; it has about 13 different human pharmaceutical lines undergoing registration while about nine veterinary products are underway. About 25 other human pharmaceutical products are scheduled to be submitted to the National Agency for Food and Drug Administration and Control (NAFDAC) for registration soon,” he said.
He also disclosed that most of the innovative products are expected to be introduced into the market in the current business year, thus expanding the company’s product portfolio.
Neimeth’s forthcoming projects, he explained, will not only sustain the current upbeat performance of the company but will give it a quantum leap into the league of leading global healthcare commodities producers.