Nigerian Stock Exchange. BAGCO launches N7 billion IPO.
November 8th, 2007 Ogbuotobo Chuks || chuks@stockmarketnigeria.com
By Ogbuotobo Chuks
The Nigerian capital market has once again come alive, as investors now have an option of buying into the IPO of Nigeria Bag Manufacturing Company plc (BAGCO) which opens November 7, 2007.
The company is seeking to raise N7 billion through an IPO of 1,865,000,000 ordinary shares of 50 kobo each at N3.90 per share. The company presently is a wholly owned subsidiary of Flour Mills of Nigeria Plc.
On the financial health of the company, turnover has risen to N11.00 billion in 2007, from N9.9 billion in 2006 and N6.29 billion in 2005. The company is projecting a turnover of N12.45 billion in 2008,N15.45 billion in 2009 and N17.15 billion in 2010. Also, dividend payout for 2008 is pegged at N0.26 billion, N1.07 billion in 2009 and N1.12 billion for 2010.
The company is said to be the largest woven polypropylene sack manufacturing company in Africa and the largest single plant in the world, with installed capacity of 200 million sacks per annum.
The minimum units that can be bought by an investor is 1000shares and in multiples of 100 thereafter.
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Any comments about the strength and viability of this company?
I think the company offers good value for money. Though I fear that with the preferential allotment pegged at 50% I see the offer being over subscribed and money being returned so I am definitely not buying that much.