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Business News

Flour Mills Nigeria to merge five subsidiaries

Shareholders have approved a proposal to merge five of Flour Mills Plc’s subsidiaries with the holding company.

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Flour Mills Nigeria, FMN, Merger, Fertilizer

Shareholders have approved a proposal to merge five of Flour Mills Plc’s subsidiaries with the holding company. This will be carried out under a Scheme of External Restructuring, the company said.

The resolution was reached on Wednesday, during a court-ordered meeting in Lagos. During the meeting, shareholders stressed the need that the restructuring exercise be carried out in a manner that is beneficial to the entire group.

A closer look at the approved proposal

In line with the approvals, all the assets previously belonging to the fertiliser arm of the Group, will now be transferred to Golden Fertiliser. In the same vein, Golden Fertiliser will take up all the pending court cases pertaining to the fertiliser arm of Flour Mills Plc.

“That all the assets, liabilities and undertakings of the fertiliser 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 Fertiliser.

“That all legal proceedings, claims and litigation matters pertaining to the fertiliser business of Flour Mills either pending or contemplated by or against Flour Mills be continued by or against Golden Fertiliser after the Scheme is sanctioned by the Court.”

A move in the right direction?

For many shareholders, the decision to approve the merger is a move in the right direction. According to the National Coordinator of Independent Shareholders Association of Nigeria (ISAN), Mr Adebisi Adeniyi, the move will result in more profitability.

“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.”

The Chairman of Golden Fertilizer Company Limited, Paul Miyonmide Gbededo, also agreed. He assured that the shareholders’ approval to merge the five subsidiaries will guarantee maximum returns on their investments. He also added that the merger was needed to streamline operations and reduce administrative costs.

“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. 

“It will enable each of the value chain in FMN Group to target appropriate investors and markets 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.”

Flour Mills Nigeria Plc is a Nigerian company with diversified business operations cutting across such areas as food, fertiliser, and agricultural produce. It was listed on the Nigerian Stock Exchange in 1979 and its stock is currently trading at N19.

Olalekan is a certified media practitioner from the Nigerian Institute of Journalism (NIJ). In the era of media convergence, Olalekan is a valuable asset, with ability to curate and broadcast news. His zeal to write was developed out of passion to shape people’s thought and opinion; serving as a guideline for their daily lives. Contact for tips: [email protected]

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Economy & Politics

FG places high profile Nigerians under security watch for terrorism financing

The FG has said that it is currently profiling a large number of high profile Nigerians who have been alleged to have reasonable links to terrorism financing.

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FG to establish a new anti-corruption agency, P&ID, FG, malami, $9bn fine is a scam - Federal Government , UPDATED: P&ID operations shut down, assets forfeited by court order

The Federal Government has said that it is currently profiling a large number of high profile Nigerians who have been alleged to have reasonable links to terrorism financing.

This follows the arrest of an undisclosed number of suspects recently after the convictions of some Nigerians on terrorism financing in the United Arab Emirates (UAE).

This disclosure was made by the Attorney General of the Federation and Minister of Justice, Abubakar Malami, during a chat with the press at the Presidential Villa, Abuja on Friday.

What the Attorney General of the Federation is saying

The Minister said that the convictions of Nigerians in the UAE has given rise to wider and far-reaching investigations in Nigeria.

Malami in his statement said, “As you will actually know, sometimes back, there were certain convictions of Nigerians allegedly involved in terrorism financing in the United Arab Emirates (UAE).

That gave rise to a wider and far-reaching investigation in Nigeria and I’m happy to report that arising from the wider coverage investigation that has been conducted in Nigeria, a number of people, both institutional and otherwise, were found to be culpable, I mean reasonable grounds for suspicion of terrorism financing have been established, or perhaps has been proven to be in existence in respect of the transactions of certain high-profile individuals and businessmen across the country.

I’m happy to report that investigation has been ongoing for long and it has reached an advanced stage. Arriving from the investigation, there exists, certainly, reasonable grounds for suspicion that a lot of Nigerians, high-profile, institutional and otherwise, are involved in terrorism financing and they are being profiled for prosecution.

In essence, it is indeed true that the government is prosecuting and it’s indeed initiating processes of prosecuting those high-profile individuals that are found to be financing terrorism. It is indeed true.

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However, Malami did not give the number of such suspects as he maintained that investigation was still ongoing until a conclusion is arrived at.

“As to the number, the investigation is ongoing and it has to be conclusive before one can arrive at a certain number, but one thing I can tell you is it is a large number and they are being profiled for prosecution.

It is indeed a large number and I’m not in a position to give you the precise number as at now because the profiling and investigation are ongoing.”

Malami warned that government will not hesitate to invoke the full wrath of the law on anyone found culpable in sponsoring terrorism in the country as nobody found culpable in terrorism financing will be spared.

What you should know

It can be recalled that in March 2021, the Association of Bureau De Change Operators of Nigeria (ABCON) confirmed the arrest of some of its members by security operatives over the investigation of some of their transactions which border on money laundering, terrorism financing and Know Your Customer status.

ABCON in its statement said that it considers these as serious allegations especially given the security challenges facing the country. It appealed to the authorities to expedite action to ensure that innocent people who have been caught up in this investigation can be released and so that they can return to their anxious families and resume their lives.

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Macro-Economic News

Nigeria’s VAT collection surges to N496.4 billion in Q1 2021

Nigeria’s VAT collection surged by 52.93% (year-on-year) to stand at N496.4 billion in Q1 2021.

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VAT

Nigeria generated a sum of N496.39 billion revenue from Value Added Tax (VAT) in the first quarter of 2021, a surge of 52.93% year-on-year compared to N324.58 billion recorded in the corresponding period of 2020.

This is contained in the sectoral distribution of value added tax report, recently released by the National Bureau of Statistics (NBS).

According to the report, VAT collections in the period represents a 52.93% increase as against N324.58 billion recorded in Q1 2020; and a 9.17% increase compared to N454.7 billion recorded in the previous quarter.

The increase in VAT collections could be attributed to increased economic activity in the country, compared to the previous year, where most economic activities were put on hold as a result of the covid-19 pandemic.

Highlights

  • Highlights of the report showed that the manufacturing sector generated the highest amount of VAT with N49.41 billion generated, closely followed by Professional Services, having generated N42.50 billion, and State Ministries & Parastatals, which generated N26.96 billion.
  • Mining generated the least, closely followed by Pioneering, Textile & Garment Industry with N48.36 million, N77.01 million, and N289.41 million generated respectively.
  • Also, out of the total amount generated in Q1 2021, N224.85 billion was generated as Non-Import VAT locally while N171.66 billion was generated as Non-Import VAT for foreign.
  • The balance of N99.88 billion was generated as NCS-Import VAT.

Manufacturing sector topples professional services

The manufacturing sector toppled the professional services sector to lead the list of sectors with the highest VAT remittances in the first quarter of 2021. A total of N49.41 billion was collected as Value Added Tax from the manufacturing sector.

  • Professional services followed closely, having remitted N42.5 billion in VAT to the government, State ministries and parastatals stood in third position with N26.96 billion VAT.
  • Others on the list include; Commercial and trading sector with N22.8 billion, oil-producing (N15.8 billion), Transportation and haulage services (N14.9 billion), Breweries, bottling, and beverages (N11.9 billion).
  • Federal ministries and parastatals (N8.8 billion), banks and financial institutions (N3.3 billion), and oil-marketing (N3 billion).

Why this matters

  • The increase in VAT collection is a development in the right direction, especially given the recent positive growth recorded in global crude oil prices, indicating an increase in government revenue.
  • However, the government needs to intensify its effort in creating innovative ways of increasing revenue given growing overheads and statutory spending, coupled with increasing debt profile.

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