Evans Medical Nigeria Plc Targets N3.5b Under Recapitalisation Scheme
Lagos – AS part of its five-year development strategy, Evans Medical Plc is targeting a recapitalisation bid of N3.5 billion from rights issue and core investorâ€™s capital.
And barring any change in plan, the reinvestment bill will be ratified at the companyâ€™s general meeting in Lagos Thursday, paving the way for existing shareholders to increase their investment in the company.
The bid, according to the management, is to scale up growth in its local manufacturing arm and strengthens returns to its shareholders.
Group Managing Director (GMD) Evans Medical Group, Bunmi Olaopa told reporters in Lagos Tuesday that the indigenous pharmaceutical manufacturing and trading company is on course in its developmental programme but still needs more working capital to bring the plan to full cycle.
Olaopa noted that the company had in the last three years, strengthened its production capacity to one of the highest in the country, coupled with the refurbishment of its plants in readiness for the World Health Organisationâ€™s pre-qualification certification by October 2013.
The GMD observed that a lot of assistance had been received from the Bank of Industry in the area of machinery and working capital from the commercial banks. But with loans on working capital at about 25 per cent, most of the profit made also goes into debt servicing.
â€œFrom our results last year for instance, we paid about N505million as finance debt, which we think is too high. So we believe the best way out is for the owners of the company to come out to reinvest in the company so we can pay off most of this expensive debt and have enough to take the company forward,â€ he said.
Olaopa was confident that the bid resolutions would be approved at the shareholdersâ€™ meeting, saying, â€œit is easier for us to feel the temperature because it is rights offer. These are existing shareholders and we know the major ones.â€
He added: â€œOnce we are given the assurance that they will take up their rights, and then we have no fear that the offer will be successful. The second resolution has the core investor and on this we are not in a hurry. The core investor we are looking for must bringing in money and value. A core investor that has a very good product pipeline, preferably a Research and Development (R&D) based company.
â€œWe are also ready to go into other areas that will add value to the company, and not necessarily drugs. We are already search. All put together, the money we are looking for is N3.5 billion. It will not all come from the rights issue.