DEAL TO SAVE DANGOTE FLOUR MILLS REACHED.

The major shareholders of Tiger Branded Consumer Goods PLC (TBCG)  hitherto known as Dangote Flour mills has been reached by its major shareholders.
According to information sent to the Nigerian stock exchange, the major shareholders. Tiger Brand ltd and Dangote Industries (DIL) have reached an agreement which is however subject to the approval of Nigerian Securities and Exchange Commission (SEC) and the Exchange control division of the South African Reserve Bank.
Under the Share purchase and sale agreement Dangote Industries will inject N10bn into the company while Tiger Brands will offload its 65.7% holding to DIL for a nominal consideration.
In addition Tiger Brands will write off its outstanding loans to Tiger Branded Consumer Goods TBCG) and also assume outstanding debt guarantee of TBCG.
It will be recalled that in November Alike Dangote and three other directors resigned from the board of TBCG while Tiger Brands itself announced it will give no more financial support to the company.
Tiger Brands also assured fellow shareholders that it was weighing options for divesting its interests.
The future thus looked rather bleak for TBCG because as at September, it not only was recording fast growing loss, it was in dire need of cash as its working capital position declined by 114.9% to a deficit of N26970m from N12552m clocked earlier by September 2014.
Given this huge working capital gap, N10bn to be injected by DIL make not be 100% life line but added to the assumption of debt guarantees and debt write off by Tiger Brands, it should go a long way.
Indeed, following the agreement Messrs Olakunle Alake, Arnold Ekpe and Asue Ighodalo who resigned earlier are back on the board since December 10.
This is hoping the agreement gets different official nods because TBCG saga showcases fast growth that has gone sour in a solid industry like Foods in still fast growing Nigerian population.
Thousands of jobs were at stake as well because the group include three other wholly owned subsidiaries involved in agro sacks, pasta and noodles manufacture.

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