By Peter Egwuatu
Shareholders of Flour Mills, FMN Plc have endorsed proposal of the Board of Directors to restructuring programme which involves the merging of the company’s five subsidiaries with its holding company under a Scheme of External Restructuring.
The shareholders at a court ordered meeting sanctioned the proposal, while urging the board to ensure that the exercise is done in a way that will lead to higher profit to the entire group.
Among the proposals endorsed at the meeting included: “That all the assets, liabilities and undertakings of the fertilizer business of Flour Mills including but not limited to real property, equipment and machinery, plant, fixtures and fittings, motor vehicles, businesses, intellectual property rights, licenses, permits, credits and allowances be transferred to Golden Fertilizer; that all legal proceedings, claims and litigation matters pertaining to the fertilizer business of Flour Mills either pending or contemplated by or against Flour Mills be continued by or against Golden Fertilizer after the Scheme is sanctioned by the Court.”
The Chairman, Golden Fertilizer Company Limited, Paul Miyonmide Gbededo commended the shareholders for their understanding and support, while assuring them of maximum return to their investment. He stated that the principal reason for the restructuring is 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.
“ The enlarged FMN, upon completion of the restructuring would be able to reduce cost 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” Gbededo said.
While commenting on the benefits of the restructuring, he said: “It will enable each of the value chain in FMN Group to: target appropriate investors and markets; be 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.
“The restructuring process will allow each group to focus on its core market, and effectively grow market share; It will create the platform to potentially unlock value; It will increase synergy within the group and improve efficiency; It will allow for uniformity and ease of comparison with competitor’s respective sectors.
This leads to a better understanding of the independent and related groups by analysts and investors, therefore ensuring better value ascribed to the businesses.”