Shareholders of Flour Mills of Nigeria Plc on Wednesday approved the group’s plans to merge five of its subsidiaries with its holding company, FMN, under a scheme of external restructuring.
The shareholders approved the plan at a court-ordered meeting, which was held in Lagos after the Flour Mills’ Annual General Meeting.
Flour Mills had in August announced plans to merge Golden Noodles Nigeria Limited, Golden Transport Company Limited, FMN Cement Industries (Nigeria) Limited, New Horizon Flour Mills Limited and Quilvest Properties Limited with the holding company.
A statement by the Group Managing Director, FMN, Mr. Paul Gbededo, had explained that the planned merger was part of the firm’s process of restructuring the company 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
While announcing the merger plan, Gbededo stated that the company had obtained the approval-in-principle of the Securities and Exchange Commission for the merger.
He said, “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.”
Earlier, at the AGM, the shareholders approved a dividend of N5.5bn, translating into N2.10 per ordinary share of 50 kobo for the financial year ended March 31, 2015.
The Chairman, Flour Mills of Nigeria, Mr. John Coumantaros, in his speech at the AGM noted that the second half of 2014 and the first quarter of 2015 had been turbulent.
He said, “Of particular concern are borrowing costs, which have remained relatively high with the average premium lending rate inching a little to 16.9 per cent at the end of the first quarter of 2015 (16.7 per cent in March, 2014).”
Coumantaros added that the Nigerian capital market recorded its own share of turbulence in the face of challenging macroeconomic environment in 2014.
He, however, noted that the Nigerian Stock Exchange reached a significant milesont during the year with its admission as a full member of the World Federation of Exchanges.
On the company’s performance in the year, he said, “I am pleased to report that despite all these strong economic headwinds with the overwhelming operational and business challenges, the FMN Group ended the year on a good note. It posted an after tax profit of N8.5bn, a growth of 58 per cent, compared with N5.4bn in 2014.
“This impressive performance was achieved against a background of five per cent drop in revenue which was down from N325.8bn to N308.8bn.”
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Source : Punch