Shareholders of Flour Mills of Nigeria have given their approval for the separation of the BAGCO business into a 100% owned subsidiary during the company’s Annual General Meeting in Lagos.
The decision, passed by a show of hands, reflects the shareholders’ agreement to carve out BAGCO from Flour Mills of Nigeria, further divesting up to 60% equity of Flour Mills of Nigeria in BAGCO.
The corporate notice filed with the Nigerian Exchange Limited outlines the move, stating, “To carve out the business of BAGCO from that of Flour Mills of Nigeria into a 100% owned subsidiary of Flour Mills of Nigeria Plc.”
The Securities and Exchange Commission had previously approved the merger of BAGCO with Flour Mills of Nigeria in 2012.
The recent decision to create a subsidiary represents a strategic move in the company’s organizational structure.
Additionally, shareholders at the meeting approved the audited financial statement for the year ending March 31, 2023, along with a final dividend payment of N2.25 for every 50 Kobo ordinary shares held.
The re-election of several directors, including Muhammad Ahmad, Juliet Anammah, Paul Gbedebo, Yunus Saliu, and Folarin Williams, was also endorsed.
Despite a positive revenue outlook, an investment update from Cordros Securities cautioned that Flour Mills’ profitability might be impacted by the anticipated high cost of operations and foreign exchange challenges resulting from the devaluation of the naira.
The report highlighted the potential inhibiting factors, including a higher cost outlook in H2-24 and sustained FX losses impacting net operating income.