Union Dicon Salt Plc is working toward restoring its operations and meeting regulatory requirements after a prolonged period of inactivity, which led to its placement on the Nigerian Exchange Limited’s (NGX) Delisting Watchlist.
The company issued a statement on Thursday, signed by Company Secretary Alfred E. James, highlighting its efforts to return to productivity and prevent delisting.
The Company has experienced a prolonged period of inactivity, during which production and other business operations were largely dormant.
What they are saying
Union Dicon Salt Plc reiterated its commitment to meeting regulatory requirements after years of dormancy.
The company disclosed that it had been unable to contact its majority shareholder, Aims Limited, despite multiple efforts, a situation that has compounded its challenges.
- “The company has been unable to contact its majority shareholder, Aims Limited, despite repeated attempts,” said the company in its statement.
- “A delisting process has been put on hold, and the company has received a stay of action from NGX for a defined period during which it must address the issues leading to the delisting notice.”
- “Management has been granted a two-year period by NGX to implement measures aimed at restoring the company to full operational and regulatory compliance.”
The statement also highlighted the steps taken by the company’s new management to reposition it for growth and regulatory compliance.
Backstory
The company has faced years of inactivity, during which its production and business operations came to a standstill. As a result, Union Dicon Salt was placed on the NGX Delisting Watchlist, which is reserved for companies at risk of being delisted.
Union Dicon Salt also revealed that it had been unable to establish contact with its 40% majority shareholder, Aims Limited, despite efforts.
The company noted that Aims Limited holds 64 million shares, or 40% of Union Dicon’s total issued share capital.
The company issued the public notice in compliance with regulatory requirements, urging Aims Limited to engage with the company and help address the situation.
More insights
As part of its efforts to return to full operations, the company has taken several key steps to reposition itself:
- The commissioning of its salt and pepper production facilities, which have received the necessary NAFDAC approvals.
- The commencement of packaging operations for Dicon Salt and Dicon Hot Pepper.
- The company has also focused on engaging shareholders with five per cent or more equity interest to ensure alignment with its new strategic direction.
Despite these efforts, Union Dicon Salt has struggled to communicate with its majority shareholder, which is critical for its success and compliance with NGX requirements.
- “The involvement of the majority shareholder has become an urgent necessity to move forward and comply with the post-listing requirements of the NGX,” the company stated.
Union Dicon Salt emphasized its commitment to maintaining the highest standards of corporate governance, transparency, and regulatory compliance as it works toward restoring normal operations and ensuring continued compliance as a listed entity.
What you should know
The company’s inability to communicate with Aims Limited, which holds a 40% stake, raises concerns over corporate governance.
- The absence of the majority shareholder could affect decision-making processes, shareholder resolutions, and voting dynamics at annual general meetings.
- A 40% shareholding in a publicly listed company typically holds substantial influence over strategic decisions, making Aims Limited’s lack of communication a critical issue.
The company remains focused on restoring its operations and overcoming the challenges it faces, with the goal of preventing delisting and continuing its operations as a compliant NGX-listed company.
