Shareholders of Flour Mills of Nigeria Plc (FMN) have endorsed the company’s bid to merge five of its subsidiaries with its holding company.
The company had obtained the approval-in-principle of the Securities and Exchange Commission (SEC) to merge five of its wholly owned subsidiaries – Golden Noodles Nigeria Limited, Golden Transport Company Limited, FMN Cement Industries (Nigeria) Limited, New Horizon Flour Mills Limited and Quilvest Properties Limited with Flour Mills of Nigeria Plc.
The management explained that the restructuring resulted from the need to streamline operations, reduce administrative costs, improve operating efficiency and derive full benefits of synergy in line with the company’s long term strategic thrust.
Speaking at its 55th annual general meeting held in Lagos recently, the Chairman of Flour Mills, John Coumantaros, assured shareholders of improved benefits from the merger.
The company’s results showed a profit after tax of N8.5 billion in its 2015 results, compared with N5.4 billion in 2014. The performance was achieved against the background of five per cent drop in revenue, which was down from N325.8 billion to N308.8 billion.
Flour Mills’ board recommended a total dividend pay-out of N5.5 billion in the year under review. Coumantaros, however, pointed out that the later stage of the company’s strategic expansion unfortunately coincided with the sudden slump in global crude oil prices. This, he stated resulted in major devaluation of the naira leading to increases in import costs and financial charges.
As a result, the company sought and obtained shareholders’ approval to raise its authorised share capital from its current N2 billion to N2.5billion and to thereafter, subject to regulatory approvals, issue additional shares by way of rights to existing shareholders on the basis of five new ordinary shares for every 12 ordinary shares held at N27.50 per share.
The chairman added: “We shall strive to strengthen our core food business and, in tandem with our strategic business thrust and in alignment with government’s vision of developing the Agricultural sector, we are determined to ensure the success of our agro-allied investments; and in doing so, maximise local content in our final products and derive group synergies.”
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