Dangote Sugar Refinery (DSR) has announced its intention to merge with its subsidiary, Savannah Sugar Company Limited (SSCL).
The Details: In a notice sent to the Nigerian Stock Exchange (NSE) and the general investing public, the board of directors recommended that the business combination would occur through a scheme of external restructuring which would then result in the merger.
The scheme recommended a transfer of all assets, liabilities and undertakings of Savannah Sugar to Dangote Sugar. It also recommended the cancellation of the entire issued share capital of Savannah Sugar to produce Dangote Sugar Refinery as the surviving entity.
However, the scheme is subject to the approval of the shareholders of both companies and regulatory approval of authorized agencies.
“The transaction will be subject to the receipt of the approval of the shareholders of DSR and SSCL at duly convened separate court-ordered meetings of DSR and SSCL respectively as well as, the receipt of regulatory approvals of the Securities and Exchange Commission and the Federal Competition and Consumer Protection Commission.”
A look into Dangote Sugar financials: The company reported a decline in profit in its 9 months financial statement for 2019. It reported a revenue of N117.4 billion in the last three quarters of 2019, indicating a 0.57% increase compared to its N116.8 billion revenue for 2018.
Cost of sales increased by 1.5% to N88.4 billion, up from N87 billion during the comparable period last year.
However, there was a 12.4% decline in the company’s profit before tax for the period which stood at N22.9 billion compared to N26.2 billion during the comparable last year.
In the same vein, the company’s profit after tax declined by 12% to N14.8 billion compared to N16.9 billion recorded in the first three quarters of last year.
About Dangote Sugar Refinery: Dangote Sugar Refinery Plc commenced business in March 2000 as the sugar division of Dangote Industries Limited. The sugar-refining factory at Apapa port was commissioned in 2001 with an initial installed capacity to process 600,000 MT of raw sugar per annum. In December 2007, DSR Plc successfully exported its first consignment of 1,500MT of sugar to Ghana.
Savannah Sugar Company Limited: Savannah Sugar Company Limited (SSCL) is an existing cane sugar production operation located on 32,000 hectares of land in Numan, Adamawa State, Nigeria, with a milling capacity of 50,000 tonnes of sugar per annum. At present, SSCL produces refined sugar from just 6,750 hectares of sugarcane cultivated on its sugarcane fields.
It is a subsidiary of the Dangote Sugar Refinery.