Ecobank warns Flour Mills Nig Plc against proceeding with Honeywell acquisition

Codi Saxon

Ecobank Nigeria Restricted has suggested Flour Mills of Nigeria Plc from the proposed acquisition of fairness stake in Honeywell Flour Mills Plc. The financial institution alleged that Honeywell Group Confined, the parent agency, had not been servicing its financial loans with the bank, in accordance to Punch. In a letter […]

Ecobank Nigeria Restricted has suggested Flour Mills of Nigeria Plc from the proposed acquisition of fairness stake in Honeywell Flour Mills Plc.

The financial institution alleged that Honeywell Group Confined, the parent agency, had not been servicing its financial loans with the bank, in accordance to Punch.

In a letter dealt with to the Controlling Director of Flour Mills of Nigeria and signed by solicitors to Ecobank, Kunle Ogunba and Associates, the enterprise, as perfectly as the public and corporate bodies ended up warned of the “hazard inherent in dealing in any shares of the company.”

The financial institution alleged that it had highly developed several financial loan amenities to Honeywell Flour Mills, which includes doing the job cash disbursements. Even further stating that as a consequence of the failure of the firm to liquidate its loan amenities, it was constrained to begin winding up proceedings towards Honeywell Team Confined at the Federal Substantial Court, Lagos in suit no: FHC/L/CP/1571/2015.

The letter reported, “Nonetheless, when the explained motion was dismissed at the Federal High Court docket and the Courtroom of Enchantment, it is pertinent to state that an attraction with attraction no: SC/700/2019 has been filed hard the claimed selection at the Supreme Court (Recognize of Charm is herein enclosed and marked as Annexure C).

“Hence, the outcome of the previously mentioned is that there is currently a winding-up motion/proceeding pending against the reported Honeywell Group Restricted.”

The bank quoted a provision of Part 577 of the Companies and Allied Issues Act 2020 as indicating, “Exactly where a corporation is remaining wound up by the court, any attachment, sequestration, distress or execution put in force versus the estate or consequences of the business immediately after the graduation of the winding-up is void…”

According to the bank, this restricts Honeywell Team from relocating in advance with the sale of Honeywell Flour Mills to Flour Mills of Nigeria.

As a result, we hereby demand that Flour Mills of Nigeria Plc, in its very best corporate fascination, promptly cease and desist from consummating the topic transaction, which aims to divest the assets of a organization staying wound up (Honeywell Group Minimal).

“Please be further knowledgeable that the assets of each Honeywell Group Confined and Honeywell Flour Mills Plc. are the matter of the winding-up action and thus dependent on the doctrine of “lis-pendens” (in addition to the provisions of CAMA provided previously mentioned) you are recommended to refrain from working with the matter asset which kinds section of the issue subject of litigation,” the bank included.

Record of Courtroom Scenarios

Both companies have been in a lengthy-standing authorized battle given that 2015 about an unpaid debt of N5.5 billion by the latter. Whilst Ecobank is maintaining that Honeywell is indebted to it to the tune of the aforementioned revenue, out of which N3.5 billion experienced been paid out, Honeywell claimed to have paid out the credit card debt in full.

  • In the wake of the legal tussle, Dr. Oba Otudeko, Honeywell Group chairman, experienced informed a Court of Attractiveness that the sum was owed to specific companies. These corporations incorporate Anchorage Leisures Constrained, Siloam Limited, and Honeywell Flour Mills Plc.
  • Otudeko taken care of that his providers had paid out N3.5 billion as of December 12, 2013, as the whole and ultimate payment for the N5.5 billion financial debt as agreed by the events at a July 22, 2013 meeting.
  • Browse this write-up for much more.

What you must know

  • Flour Mills of Nigeria (FMN) and Honeywell Team Limited (HGL) introduced that they have signed an arrangement to which Flour Mills will purchase Honeywell Group’s portfolio firm, Honeywell Flour Mills PLC (HFMP).
  • Nairametrics reported that at the moment, the two firms owe about N220 billion in exterior loans for every their 2021 half-year success. Honeywell at this time has a financial debt balance of N78.5 billion though Flour Mills is also personal debt-laden with about N142.8 billion in credit card debt.
  • In accordance to Stanbic Study, the administration group of Flour Mills Nigeria Plc system to fund the deal via cash and credit card debt funding.

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