Insights on Unilever's Right Issue

Unilever Nigeria yesterday announced it was seeking approval and listing of a right issue of 1,961,709,167 ordinary shares of 50k each at N30.00 per share on the basis of 14 new shares for every 27 already owned by shareholders.

If successfully raised, it will amount to N58.85 billion, which is lower than the N63 billion approved by the shareholders at the last annual general meeting (AGM) in Lagos.

The directors had proposed to shareholders at the AGM to approve a N2billion increase in its authorised shares from N3.03billion to N5billion by the creation of additional 3.95 billion new ordinary shares of 50 kobo and to raise up to N63 billion by way of Rights Issue, subject to obtaining regulatory approval.

According to the group, the funds would be used to finance short term bank borrowings and enhance its operations among other reasons. Unilever Nigeria had increased its revenue by 17.8 per cent from N59 billion recorded in FY 2015 to N69 billion in FY 2016 while Profit After Tax (PAT) jumped by 157 per cent from N1.19 billion in FY 2015 to N3.07 billion in FY 2016.