Shareholders approves external restructuring between flour mills of Nigeria plc and Golden Fertiliser Company Limited

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Shareholders of Company, Flour Mills Nigeria Plc on Wednesday March 6, 2019, at a Court Ordered Meeting in Lagos, approved the board of directors’ request to the proposed scheme of external restructuring between flour mills of Nigeria plc and Golden Fertiliser Company Limited.

 

The said restructure the company business of Golden Fertilizer Company Limited will be spun off from Flour Mills Nigeria Plc.  Parts of the restructuring is that the agro allied related subsidiaries will be transferred to Golden Fertilizer Company, such that it emerges as the holding company for the agro allied business value chain.

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The Managing Director of Flour Mills of Nigeria Plc, Mr Paul Gbededo, who chaired the meeting, gave insight into the proposed merger to shareholders and other stakeholders saying the restructuring will enable each of the business value chain in Flour Mills Group to target appropriate investors, market and attracted to the specific businesses.

Gbededo also said the initiative will increase the capital allocation capacity and flexibility of Flour Mills Group, as each business value chain will be able to attract new capital targeted at the specific opportunities of the respective businesses. He noted that the restructuring will also allow each business value chain to focus on its core market and effectively grow market share, create a platform to potentially unlock value.

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He further said that it will allow for uniformity and ease of comparison with competitors’ respective sectors “that this will lead to a better understanding of the independent and related groups by analyst and investors, therefore ensuring better value ascribed to the businesses and ensure shareholders value maximization because of a more effective and efficient utilization of resources”.

 

Flour Mills of Nigeria Plc (FMN), 59 years old by September 29, which was incorporated on 29th September, 1960 as a private limited liability company with a modest paid-up share capital of N1 million and converted to a public company in November, 1978 with beneficial interest in the company’s equity is held by Nigerian and Overseas shareholders.

According to the records, presently, two foreign shareholders own about 56 percent of the company’s paid-up share capital.  The balance is held by over 75,000 individuals and institutional investors.

The management reiterated that the principal reason for the restructuring is the need to improve operating efficiency and enhance shareholder value because of the expected improved profitability.

 

It was disclosed that following the restructuring, the operations of Golden Fertiliser will continue essentially in the same manner as prior to the restructuring, albeit now as a standalone company. As such, we do not anticipate the restructuring to have any significant impact on the number of people currently employed by FMN in its fertilizer division, and on their terms and conditions of employment.

 

The Caption Photo: Managing Director of Flour Mills of Nigeria Plc, Mr Paul Gbededo

 


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