Following shareholders’ approval in its recent Annual General Meeting, Cadbury Nigeria Plc has filed an application to the Nigerian Stock Exchange to raise about N2 billion via right issue to its existing shareholders. As a result, the Exchange has placed the stock on technical suspension at N13.54.

A statement from the company, signed by its Corporate Affairs Manager, Mr Kufre Ekanem, confirmed the development, saying that the company had filled all necessary documents to the regulatory authority.

The statement reads in part: “Cadbury Nigeria Plc confirms that it has commenced the process of the rights offer to existing shareholders. In this respect, the draft rights issue circular and other relevant documentation has been lodged with the regulatory authorities for approval. Consequently, a technical suspension has been placed on trading of the company’s shares, in accordance with capital market rules.”

Though the information manager for the company refused to give further details about the issue, saying that it was still subjected to the approval of the regulator, a report, however, quoted the NSE spokesman, Mr Sola Oni, as saying: “The company submitted an application for a rights issue of 2.57 billion ordinary shares of 0.50 naira each at N8.65 per share”.

Cadbury shareholders had at its last AGM approved the company’s plans for the rights issue to reduce more than $100 million in bank debts that led to net losses for three years. The firm said in early June the rights issue would be used to reduce bank debts of N15.2 billion which helped drive it to a net loss of N2.84 billion last year.

The loans were taken to help finance imports and to meet working capital requirements, according to its annual report.

Cadbury is a prominent maker of confectionary in the country with products range including Bournvita drinks, Bubba bubble gum, Trebor, mints, Tom Tom and Eclairs Sweets. It also has a wholly owned cocoa processing subsidiary, stanmark.