Flour Mills of Nigeria Plc (FMN), an agro-allied company, has received approval from its shareholders to merge five of its subsidiaries with its holding company under a Scheme of External Restructuring.
The merger involves; 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 firm had earlier on unveiled plans of carving out its fertilizer business from Flour Mills of Nigeria Plc registering it as an independent entity but fully owned by Flour Mills of Nigeria Plc.
The company’s directors had also proposed to embark on a restructuring exercise that sought to allow each group to focus on its core market and effectively grow market share, reports The Guardian.
However, the shareholders urged the board to ensure the exercise is done in a way that will lead to higher profit and add value to the entire group.
Among other proposals endorsed during the shareholders’ meeting are that all the assets, liabilities and undertakings of the fertilizer business of FMN be transferred to Golden Fertilizer
This will include, but not limited to; real property, equipment and machinery, plant, fixtures and fittings, motor vehicles, businesses, intellectual property rights, licenses, permits, credits and allowances.
Additionally, the shareholders sought to see that all legal proceedings, claims and litigation matters pertaining to the fertilizer business of Flour Mills or its Golden Fertilizer are sanctioned by the court.
Speaking on behalf of shareholders, Adebisi Adeniyi, the National Coordinator, Independent Shareholders Association of Nigeria (ISAN), said:
“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.”
Paul Miyonmide Gbededo, the Chairman, Golden Fertilizer Company Limited, commended the shareholders for approving the merger while assuring them of maximum return on their investment.
Mr Miyonmide noted that the restructuring is aimed at streamlining the company’s operations, reduce administrative costs and improve operating efficiency – in line with the company’s long term strategic thrust.
“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.
[this] will drive down costs, make product pricing more competitive, improve profitability and enhance the bottom line for the benefit of all stakeholders,” he said.
Additionally, he said that this will enable each of the value chains in FMN Group to target appropriate investors and markets attracted to the specific businesses.
Apart from the milling sector FMN also has investments in corn, soybeans, sorghum, sugarcane, palm oil, rice, cassava and poultry and fertiliser production.