The management of Vitafoam Plc has received approval to raise N4bn from the capital market.
The approval was given by its shareholders at the company’s Extra Ordinary General Meeting in Lagos.
A statement by the company on Wednesday said the shareholders at the meeting authorised the management to raise the funds to finance its diversification programme.
It stated that the shareholders passed the resolution in line with the company’s Articles of Association, adding that the directors were authorised to raise up to N4bn by issuing securities such as equities or debt by way of public offer, rights issue, debentures, special placing and other options or combination of any of the methods.
They also authorised the directors to make supplementary allotment of the securities issued in the event of an over-subscription.
They were also asked to enter into and execute any agreements, deeds, instruments, notices and other documents in connection to the offer.
The Managing Director of the company, Mr. Joel Ajiga, said the company was seeking the funds to consolidate its activities and add more value to the investment of its shareholders.
He explained that the company had plans to bring up other subsidiaries in addition to the ones it already had to make products that would satisfy the yearnings of its customers.
He explained there was the need to seek additional capital to fulfil this purpose.
He said, “A close look in the last few years will reveal to you that Vitafoam is already evolving as a one-stop company that is tailored to meet various needs of the customers. Our strategy is to ensure that the company becomes an integrated business with well-placed subsidiaries that would be developed to satisfy different levels of needs of the customers.
“In line with this, we have set up some subsidiaries and because of the level which we want this business to attain; there is need for more capital to be injected into the business. The truth is that our shareholders have also seen the need for this, and that is why they have agreed to support us in this idea to raise funds.”
Ajiga explained that the company considered raising the bulk of the funds through rights issues, adding that as time went on, other methods to raise the funds might be considered.
Shareholders at the meeting advised the company to make judicious use of the funds, adding that this would go a long way towards improving the fortunes of the business, the statement said.
The President, Progressive Shareholders Association of Nigeria, Mr. Boniface Okezie, also advised the company to invest the funds wisely in such a way as it would ensure increased returns as well as bonus issues for investors.