Kaduna: By Emeka Mamah
Union DICON Salt Plc, is to sell 51 per cent of its shareholding to a prospective core investor.This was disclosed by the Chairman of the company and former Minister of Defence, Lt Gen. Theophilus Danjuma. Danjuma who spoke at an extra- Ordinary General Meeting of the company at Command Guest House, Kaduna lamented the sorry state of affairs in Union DICON which he attributed to mismanagement by the former foreign technical partners.
According to Gen. Danjuma the unnamed Brazilian company sold off the interests of the shareholders of DICON salt in Salina Branco Ltd and failed to account for the sale.
â€œThe financial statements of your company for the years 2004 â€“ 2008 are yet to be presented to you due to the inability of the company to hold an Annual General Meeting since the year 2005.
â€œYou may recall that at the last Extra-Ordinary General Meeting, I did inform you that your companyâ€™s capital was inadequate to do business in a large scale and to declare dividends. I further informed you that the company needed to strengthen its capital base in view of the competition in the industry and to reposition itself as a leading salt producing company in Nigeria.
â€œAs you may be aware, our erstwhile technical partners mismanaged the company and its funds. They sold off your interest in Salina Branco Ltd and are yet to account for the sale.
â€œEfforts by the company to retrieve its entitlements from the estranged technical partners for the purported sale have proved difficult, despite my personally having to travel to Brail with the companyâ€™s external solicitors, in pursuit of this bid.
â€œThe inability to recover the funds from Brazil, and the need to increase the companyâ€™s share capital led us to source for funds through a Rights Offer, which you approved.
â€œRegrettably, the Rights Offer was grossly undersubscribed with a net proceed of about N326.3 million. This represents 36 percent of the total offer size. The sum of N326.3 million realized from the Rights Issue was not sufficient to off-set the companyâ€™s liability to its bankers, who were the Issuing House/Receiving bank in the Rights Offer exercise.
â€œUpon a passionate plea by your Directors, I had to inject N68,000,000 of my personal funds to enable your company fully pay off its obligation to the Issuing House/Receiving bank and to ensure that the Rights Offer was not a total failureâ€, he said.
Meanwhile, a firm of financial advisers, Greenwich Trust Limited, has been appointed to restructure the company and negotiate with regulatory bodies for the sale of 51 percent of the companyâ€™s authorized share capital to a prospective core investor.
The financial advisers are said to be working hard to identify a core investor with technical competence for Union DICON even as the management has carried out about 70 percent refurbishment of the production equipment/machineries in the Port Harcourt factory, in preparation for the take-off of salt production by the fourth quarter of this year.