CCNN shareholders approve N1.6bn Rights Issue
May 15th, 2007 Ogbuotobo Chuks || chuks@stockmarketnigeria.com
By Ogbuotobo Chuks
Shareholders of the Cement Company of Northern Nigeria Plc have directed the company’s board to raise about N1.6bn new equity funds through a Rights Issue to further finance its business development programme.The board of the cement company has already commenced steps to speed up the rights issue to ensure that the offer proceeds get to the company by the third quarter.
According to the chairman of the company,Alhaji Ibrahim Gobir,the net proceeds of the rights issue, which estimated to be about N1.5bn would be used to set up a 12 megawatts power plant for the company through the purchase of three four megawatts generating sets; to purchase equipment to store, blend and burn biomass in the cement kiln in furtherance of the company’s alternative energy programme.This is expected to reduce the cost of operations of the company.
The Managing Director of the company, Mr Alf Karlsen, said that the energy projects were important to the sustainable profitable operations of the company. According to him, costs of heavy fuels and diesels constituted about 40 per cent of total costs in 2006.He pointed out that with the completion of the company-owned power plant, CCNN would quit the leasing arrangements that it had been using for energy generation since 2001, thus in a better position to manage its energy costs.
Just recently,the company released its audited full year results last week for the period ended December 31, 2006.Company turnover increased by 7.74 percent, from N5.9 billion in 2005 to N6.3 billion in 2006.The profit after tax however dropprd into the negative, from N108 million in 2005 to N34.9 million in 2006.
Investors should invest with their eyes wide open.
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