A Nigerian private cocoa grinder plans to raise 1.86 billion naira ($15.6 million) through a private placement of shares to reduce its debts and expand operations, offer documents obtained on Thursday showed.
FTN Cocoa Processors Ltd's 12,000 tonnes-per-year plant in the south-western city of Ibadan, which was completed in June, processes cocoa into butter, cake, powder and liquor, as well as palm kernel oil into products for local and foreign clients.
"The purpose of the private placement is to enable (FTN) to reduce gearing and associated finance charges and inject more equity into the company," board chairman Abiola Aderonmu said. FTN has offered 980 million shares at 1.90 naira each in the operation which will close on November 28, the documents said.
Nigeria's installed grinding capacity stands at about 100,000 tonnes a year. Around 40 percent of this is working, processing roughly 25 of national cocoa output. The government has banned imported cocoa products to try to spur local processing.
Grinding capacity has increased in the last three years and is seen expanding further next year when a number of new processors are due to start up. Debt repayment will gulp about 40 percent of the proceeds of FTN's placement, while about 16 percent will go into fixed assets and 44 percent will serve as working capital.
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