May & Baker increases its net loans with N1billion intervention loan from CBN
May & Baker says it received an intervention fund of N1 billion from the Central Bank of Nigeria (CBN) in the first quarter of 2020. The pharmaceutical company also said it spent its 2019 N1.8 billion Rights Issue servicing debt and paying dividends.
According to information contained in its annual report, the fund increased the company’s net loans from N482.5 million in December 2019 to N1.7 billion in the first quarter of this year.
This is not the first time the pharmaceutical company had received intervention funds; it had also received a CBN fund for manufacturers to the tune of N920 million in October 2010.
Recall that the Nigerian Stock Exchange (NSE) had listed an additional 745,234,886 ordinary shares for the company issued by way of a Rights Issue taking the total issued and fully paid up shares of the company from 980,000,000 to 1,725,234,886. The ordinary shares were of 50 kobo each at N2.50 per share and offered on the basis of one new ordinary share for every one ordinary share held as of September 4, 2018. The company had, however, used the capital raised from the Rights Issue to repay previous debts.
Based on collaboration with the Nigerian government for production and sale of vaccines, May & Baker also has three subsidiaries, Osworth Nigeria Limited, Tydipacks Nigeria Limited, and Service Nigeria Limited, including a majority shareholding in Biovaccines Nigeria Limited.
May & Baker earns 99% of its revenue from its Phamaceutical division. Its beverage division remains a small portion of its business.
The central bank also announced an N50 billion Covid-19 health care fund for the healthcare sector giving the company another unique opportunity to increase its financial muscle. The company’s share price is currently up 44%, and is one of the best-performing stocks on the exchange.
Industry watchers believe May & Baker is strategically placed to take advantage of the expected resurgence of the health care sector, probably because it recently reported signing a Joint Venture Agreement to produce a nutritional supplement with FIIRO through the Ministry of Health.
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