Dangote is selling his loss-making business unit, Dangote Flour Mills, for $361.11 million

The company – Dangote Flour Mills Plc – made this known in a corporate disclosure posted on the Nigerian Stock Exchange (NSE) on Tuesday.

Thabo Mabe, director at Dangote Flours, in the statement, said Olam International has indicated interest to acquire all the outstanding and issued shares of the flour mills company that are not currently owned by Ola through its subsidiary, Crown Flour Mills Limited.

Olam International (Reuters)

According to the statement, as at the date, Olam International through its subsidiary, holds 5,113, 229 shares in the issued share capital of Dangote Flour Mills.

This is coming two years ago after the Group also sold a unit of the business, Dangote Noodle plant, to rival pasta maker De-United Foods Industries for N3.75 billion ($12.26 million).

A worker operates a bag-sealing machine at the Dangote flour mill in Apapa district in Nigeria’s commercial capital of Lagos November 13, 2010. REUTERS/Akintunde Akinleye

The total consideration offered by Olam and being considered by the Board of Dangote Flour Mills for the entire 5 billion issued shares of the company is N130 billion.

“The consideration represents the enterprise value on a debt-free, cash-free basis, payable in cash at the closing of the proposed transaction. This consideration will be adjusted for net working capital and net debt as of 31 March 2019 or any other later date that may be agreed by Olam and the Board of Dangote Flour Mills to arrive at the final price payable to equity shareholders.

Aliko Dangote during a visit to the fertilizer plant under construction in Lagos State. Credit: ANDREW ESIEBO FOR BLOOMBERG BUSINESSWEEK

“The final price to be paid to the shareholders of the company would be adjusted downwards to exclude shares held by Olam through its subsidiary,” the statement reads in part.

Dangote Flour Mills Plc said the offer is subject to shareholders’ approval, regulatory approval, a sanction of the Federal High Court.

Dangote Flour Mills has location across Nigeria – Apapa, Ikorodu, Ilorin, Kano and Calabar and offers downstream value-added products through subsidiary companies. The business unit currently has one wholly owned subsidiary – Dangote Pasta Limited – with products such as Dangote Sugar, Dangote Pasta and Flours.

The loss-making Flour milling business of Africa’s richest man

Over the years, Dangote Flour Mills has faced a tough business environment in Nigeria. The Flour company sold to Dangote Group in 2013 by South Africa’s Tiger brands as a result of operating losses.

Since then, the company owned by Africa’s richest man, Aliko Dangote posted several losses until 2017 when it returned to profit but fell back in 2018.

In its 2018 financial result released last month, Dangote Flour Mills Plc posted N1.2 billion lost for the year and over the years the daunting Apapa gridlock and smuggling has hampered the business growth.

Source link

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More