JUNE 28 2011 , ALEXANDER CHIEJINA
As part Flour Mills efforts to improve operational efficiency through optimal utilisation of resources and increase in shareholders’ value, the company has begun an internal restructuring of one of its subsidiaries, Golden Pasta Company Limited (GPC). To this end, the company has received a boost from its shareholders to increase the current share capital from N1 billion to N2 billion.
Making this known at its extraordinary general meeting in Lagos at the weekend, George Coumantaros, chairman, Flour Mills disclosed that the main reason for the internal restructuring was to streamline operations, reduce costs of administration, create synergy and improve efficiency.
According to Coumantaros, the synergy derived from the absorption would undoubtedly enhance shareholders’ value due to the prospect of improve profitability. He maintained that the conversion would be done in a manner that the undertaking of Golden Pasta Company would continue in an unaltered form even as individuals carrying on the business would continue to substantially carry it on.
In his words “The Golden Pasta Company (GPC) Limited was set up on December 11, 2001 with an authorized and fully paid up share capital of N10,000,000 which has been increased to an authorized share capital of N4,750,000,000 and a fully paid share capital of N4,335,000, 000 as at May 28, 2010. The company was set up to manufacture, sell and distribute pasta products such as Spaghetti, Spaghettini, Macaroni, Eliche, Twist, Penne, Fideo, Rings and Couscous in response to market demand.
“This has helped increase the capacity utilization of FMN, which produces and supplies GPC with its primary raw material, durum semolina. GPC, which has a total production capacity of 285,795 metric tons per annum, recently acquired a large expanse of land at Agbara Industrial Estate for construction of a large Pasta production plant to increase capacity.”
Lending his view, Emmanuel Ukpabi, Group Managing Director, FMN, revealed that GPC has recorded remarkable growth since inception, particularly during the last five years when its turnover increased from N4, 004, 656, 00 in 2006 to N18, 297,735,000 in 2010. Ukpabi noted that the its shareholders’ fund grown from N711, 724, 000 in 2006 to N4,728, 297, 000 in March 2010.
“We have duly notified the Securities & Exchange Commission and Nigerian Stock Exchange of the scheme of arrangement being handled by our financial adviser, FCMB Capital Markets Limited and our Solicitors, Messrs ‘The New Practice.’
“In addition, the Federal High Court, Lagos by an order of court, has directed that separate meetings of shareholders of the two companies be convened on June 22, 2011 for consideration and approval of the scheme of arrangement.
Immediately after the absorption has been approved by you, we shall seek the approval of the SEC and proceed to obtain a final sanction from the Federal High Court,” he added.