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Dunlop set to absorb oversubscription


April 02, 2007/Punch



Dunlop Nigeria Plc is making moves to absorb the oversubscription that arose from its recent hybrid offer.


The company in December offered 1.5bn shares for public subscription at N2.50 per share and 756m shares as Rights Issue at N2.30 to raise over N5bn from the capital market.


However, findings by our correspondent showed that the hybrid offer was grossly oversubscribed and that the directors had plans to accommodate substantial amount of the excess money.


To this end, the directors are set to increase the authorised share capital of the company from N1.5bn to N2.7bn.


Already, an Extra Ordinary General Meeting has been scheduled to hold on Thursday, in Lagos.


The directors want the shareholders to approve the increase in the share capital.


They also want the shareholders to take the steps necessary to obtain the consent of the Securities and Exchange Commission, the Nigerian Stock Exchange and other regulatory authorities to allot shares over the number of shares offered for subscription by the company last year.


Dunlop went to the stock market for the funds partly to liquidate the loans used to finance its All-Steel Radial Tyres project and boost its operations for better performance.


The Chairman, Dunlop, Mr. Dayo Lawuyi, had explained that the completion and commencement of commercial production at the company’s ASRTplant and financial restructuring were strong signals that the company was set for a new era of growth.


He said the new tyre plant would lift the company’s sales to about N12bn by 2007.


According to him; Dunlop Nigeria was a manufacturing company with tangible growth prospects, adding that the popular market acceptance of its all-steel radial tyres and long-standing brands were an advantage.


Similarly, the Managing Director, Mr. Muhammed Yinusa, said the company was set to take its pride of place as one of the best companies in the areas of consistent and better returns.


He said the ASRT project was expected to double the company’s turnover and also impact positively on its profit margin, thus enhancing returns to shareholders.


He said the company had put everything in place to maximise the potential of its ASRT plants and strengthen its overall market share in the Nigerian tyre industry.

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