Babajide Okeowo
Shareholders of Flour Mills Nigeria Plc. have approved a proposal to merge five of its subsidiaries with the holding company. This will be carried out under a Scheme of External Restructuring, the company said.
The resolution was reached recently during a court-ordered meeting in Lagos.
During the meeting, shareholders stressed the need that the restructuring exercise be carried out in a manner that is beneficial to the entire group.
In line with the approvals, all the assets previously belonging to the fertiliser arm of the group will now be transferred to Golden Fertiliser. In the same vein, Golden Fertiliser will take up all the pending court cases, pertaining to the fertiliser arm of Flour Mills Plc.
According to Mr. Adebisi Adeniyi, National Coordinator of Independent Shareholders Association of Nigeria (ISAN), the move will result in more profitability.
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“We commend the board and management for the restructuring exercise, as we hope it will lead to higher profitability. We also hope it will not affect the existing employees and shareholding structure” he said
The Chairman of Golden Fertilizer Company Limited, Paul Miyonmide Gbededo, also agreed. He assured that the shareholders’ approval to merge the five subsidiaries will guarantee maximum returns on their investments. He also added that the merger was needed to streamline operations and reduce administrative costs.
“The enlarged FMN, upon completion of the restructuring would be able to eliminate transfer costs of materials and operate at a higher level of efficiency, which will drive down costs, make product pricing more competitive, improve profitability and enhance the bottom line for the benefit of all stakeholders.
“It will enable each of the value chains in FMN group to target appropriate investors and markets attracted to the specific businesses. It will increase the capital allocation capacity and flexibility of the flour mills group, as each group will be able to attract new capital targeted at the specific opportunities of the respective businesses.”
