Honeywell Flour Mills Plc. (HFMP) has debunked wide spread rumour that there is currently a Winding Up petition against the company in a Federal High Court in Lagos, which prohibits the company from the sales or transfer of its assets and/or liabilities to a third party.
The report became rife after a leading pan-African bank (Ecobank) had alleged that Honey Well Group Limited (parent company of HFMP) is currently indebted to it and had refused to service its loan facilities. The bank noted that the default prompted it to seek a legal redress to commence winding up proceedings against the latter, from a Federal High Court in Lagos in suit no: FHC/L/CP/1571/2015. Consequent upon this, the bank warned Flour Mills Nigeria Plc to desist from proceeding with its takeover of the assets and liabilities of HFMP.
However, in reaction to the recent development, Flour Mills of Nigeria Plc has assured its stakeholders that its recent acquisition of a majority stake of about 71.69% in Honeywell Flour Mills Plc did not breach any subsisting court order. The diversified Nigerian agribusiness company confirmed that the deal was made after carrying out necessary due diligence and obtaining appropriate legal guidance.
The confirmation was further buttressed by the position of Honeywell Flour Mills Plc on the matter, as the company debunked the claims, stating that there is no Winding Up petition (either pending or live) against the company in any court in Nigeria.
In a recent press release captioned: ‘’RE: PURCHASE OF HONEYWELL GROUP LIMITED’S 71.69% STAKE IN HONEYWELL FLOUR MILLS PLC,’’ signed by its Secretary, Yewande Giwa, and filed with the Nigerian Exchange Limited (NGX), the company assured its stakeholders that the recent transaction was made in compliance with all rules and regulations.
It also debunked the rumour that there is a winding up petition against it, stating that: ‘’It is pertinent to set the record straight that there is no Winding up Petition currently pending or live against HFMP in any court in Nigeria. There is also no pending Court Order restraining trading in the shares of HFMP or inhibiting HFMP or its owners from dealing in its assets. HFMP assures its investors, regulators and stakeholders that in all of its engagements with FMN, it received independent legal advice and asserts that the transaction is not in breach of any subsisting Order of Court, The issue as to whether HFMP is indebted to Ecobank is still before the Courts and the final decision remains the exclusive preserve of the Courts. It is also important to state that the Court of Appeal judgement being referred to in the reports did not declare HFMP to be indebted to Ecobank.
In addition: ‘’The assertion lack merit, were written in bad faith and are a deliberate attempt to undermine a transaction that will result in substantial benefit to the Nigerian economy and entrench the collaboration of two publicly quoted companies. As a responsible corporate citizen, we have entered the transaction with FMN having taken all legal issues into consideration.’’
Corroborating the position of HFMP, Flour Mills of Nigeria Plc also confirmed that its agreement with HFMP did not breach any subsisting court order. In a recent press release issued by the company, signed by its secretary, Umolu Joseph, the firm noted that: ‘’Flour Mills of Nigeria Plc (FMN) wans to assure its stakeholders that the recent announcement by the Group to assume majority stakeholder status of Honeywell Flour Mills Plc (HFMP) on Monday 22nd of November, 2021, was made after carrying out necessary due diligence and obtaining appropriate legal guidance.
‘’Consequently, FMN confirms that this agreement is not in breach of any subsisting Order of Court in matters relating to any third party.’’
It is imperative to note that the assurance from both parties is necessary to maintain stakeholders trust and confidence in the system. Recall that following Ecobank’s claim, investors of Honeywell Flour Mills Plc initiated massive sell-offs of the company shares yesterday, this resulted to a trading loss of about 9.78%, as the shares of the company dropped from N4.09 as at the start of trading session yesterday to N3.69 by the close of business in the same period. Market capitalization also shed about N3.17 billion in the period under review.
Recall that both FMN Plc and Honeywell Group Limited on Monday announced the signing of an agreement that will allow the former acquire about 71.69% stake in the latter. The deal is worth an estimated N80 billion.