Neimeth To Raise N3.67bn Through Rights Issue

Neimeth International Pharmaceuticals Plc has held a completion board meeting to float a rights issue of N3.67 billion through the Nigerian capital market.

At the meeting held yesterday in Lagos, it was made known that the rights issue, which will commence on August 3, 2022 will be used to raise the sum of N3.67 billion at the cost of N1.55 per share.

The shareholders of the company had in March, 2022 at the 63rd Annual General Meeting (AGM) approved the creation of 2.374 billion additional ordinary shares which will be allotted at the rate of five new shares for every four shares currently held in the company.

The chairman of the Board of Neimeth, Dr. Ambrosie Orjiako said the money is being raised to construct a new multi products facility that will be tailored to comply with the Word Health Organization (WHO) current standards of Good Manufacturing Practice (cGMP) 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,” he said.

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The managing director/CEO of Neimeth, 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, saying “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.”

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.

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 additional 300 per cent to the company’s production capacity.

Orjiako said 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.

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.

Orjiako said the Board is working with management to ensure that the growth trajectory is sustained. 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 five kobo 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.