Notore to raise N40 billion through rights issue

The Board of Directors of Notore Chemical Industries Plc has finalised plans to raise capital for the firm through a rights issue.

This was revealed in a notification sent to the Nigerian Stock Exchange. The approval is, however, subject to the approval of Shareholders and the Nigerian bourse.

The rights issue is of Forty Billion Naira Only (N40,000,000,000) which could be raised via issuance of shares, loan notes, bonds and/or convertible and non-convertible securities, depository receipts or any other instrument determined by the Directors of the agr0-allied firm.

It is of common knowledge that a rights issue is a way for companies to raise capital. In this regard, capital is raised when existing shareholders pay for the new shares that are being issued.

The firm may use the raised capital to acquire assets, make a take-over, repay debts or save itself from bankruptcy. Although a company can raise capital in other ways, such as borrowing from banks or issuing bonds, there can be times when the companies may be reluctant to seek credits from banks because of the high-interest rate incurred by loans.