6TH AUGUST, 2010
The Company has informed The Exchange of the eventual reconciliation between the Company and Bank PHB Plc (its major creditor) of the legal battle over the winding up petition filed by Bank PHB Plc resulting from the Company’s inability to meet up with its financial obligation to the Bank.
Based on the reconciliatory agreement, Bank PHB Plc has applied for a CBN/BOI Intervention Fund to restructure the overdraft facility plus additional N200m for working capital and N50m each for facility upgrade and distribution channel expansion respectively. Wema Bank Plc has also secured the BOI approval in respect of N90m owed the bank and restructuring same for a period of 10 years at 7% annual interest rate with 2 years Moratorium. On the other hand, Zenith Bank Plc has also applied to BOI for a restructure of its facility. This restructuring effort is expected to put paid to the pending winding up petition and give the Company the much needed leverage to anchor an enduring repositioning plan.
After achieving the BOI approval to refinance all her overdraft facilities, the company intends to pursue the following plans:
a) Special placing of shares to strategic core investors with passion for the business
b) Raise fresh funds from asset disposal and business restructuring
It is expected that when the Company is able to follow through with the above plans, it will emerge stronger from the current challenge and be better positioned to post impressive performance.