Flour Mills of Nigeria says its acquisition of majority stake in Honeywell not in breach of any court order

Flour Mills of Nigeria Plc  said on Thursday that  declaration to acquire  majority interest  in Honeywell Flour Mills  Plc is not  in breach of any court order as decision was made following “necessary due diligence and obtaining appropriate legal guidance.”

The assurance became necessary after Ecobank had warned Flour Mills of Nigeria Plc. to desist from acquiring Honeywell Flour Mills Plc. The bank had alleged that Honeywell Group Limited (the parent company of Honeywell Flour Mills) had not been servicing its loans with the bank.

Consequently, on its failure to liquidate its loan facilities, the bank stated that it was constrained to commence winding-up proceedings against the parent company at the Federal High Court, Lagos in suit no: FHC/L/CP/1571/2015.

FNM  said in a notification to the Nigerian Exchange Limited on Thursday that the pact is not in violation of any subsisting court order in issues pertaining to any third party.

It said the announcement came in response to reports saying that Ecobank has warned Flour Mills against the acquisition of Honeywell, because the company is facing winding up proceedings.

“Stakeholders are therefore urged to maintain their trust in FMN’s management whose actions are guided by global best practices, as we work diligently to maintain the group’s sterling reputation as one of Nigeria’s leading and oldest agro-allied companies,” Flour Mills said.

On Monday, the firm said it has closed a deal with Honeywell to buy out a 71.69 per cent interest in the latter and FBN Holdings’ 5.06 per cent stake in the entity all summing up to 76.75 per cent.

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Flour Mills said in an earlier regulatory filing it has an understanding for the proposed combination of FMN through its affiliates and Honeywell, for a total enterprise value of N80 billion.

In a separate statement, Honeywell said “it is pertinent to set the record straight that there is no winding up petition currently pending against HFMP in any court in Nigeria.

“There is no pending court order restraining trading in the shares of HFMP or inhibiting HFMP or its owners from dealing in its assets.”

“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.”

Below are the statements from the two entities released via the Nigerian Exchange (NGX).

Re: Purchase of Honeywell Group Limited’s 71.69% Stake in Honeywell Flour Mills Plc

Honeywell Flour Mills Plc (“HFMP”) assures its stakeholders that the recent announcement on Flour Mills of Nigeria Plc”s (‘FMN’) acquisition of a majority stake in HEMP on Monday 22nd  of November 2021, was made in compliance with all rules and regulations. This further assurance has become necessary in view of the publication captioned “Ecobank Warns against Acquisition of Honeywell Flour Mills, Alleges Company Facing Winding Up Proceedings”

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.

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The assertions 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.

All stakeholders are hereby assured that management of Honeywell Flour Mills Plc will continue to act in the best interests of all concerned and work diligently to preserve value for all its shareholders.

We expect that from the proposed combination, stakeholders will benefit from the more than 85-year combined track record of FMN and HFMP and their shared goal of making affordable and nutritious food available to Nigeria’s population. The country and its food security agenda will benefit from both companies’ focus on developing Nigeria’s industrial capability, its agricultural value chain and specifically backward integration of the food industry.

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Flour Mills of Nigeria Plc Assures Stakeholders That Acquisition of Majority Equity Interest In Honeywell Flour Mills Plc Not in Breach of Any Subsisting Order of Court

Flour Mills of Nigeria Plc (‘FMN”) wants to assure its stakeholders that the recent announcement by the Group to assume majority shareholder status of Honeywell Flour Mills Plc (“HFMP”) on Monday 22°¢ 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. This further assurance has become necessary in view of the publication captioned “Ecobank Warns against Acquisition of Honeywell Flour Mills, Alleges Company Facing Winding Up Proceedings” whose actions are guided by global best practices, as we work diligently to maintain the Group’s sterling reputation as one of Nigeria’s leading and oldest agro-allied companies.

FMN in a Statement had earlier disclosed that it had reached an agreement for the proposed combination of FMN through its affiliates and HFMP, for a total enterprise value of NGN8O billion. It is expected that this combination will create a more resilient national champion in the Nigerian food industry, ensuring long-term job creation and preservation.

Greater benefits expected from the combination include enhanced efforts in attaining National food security objectives and leveraging opportunities stemming from the African Continental Free Trade Area (AfCFTA).

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