WednesdayNovember 24, 2021 / 07:02 PM / by Dayo Adenubi of Punch Newspaper/Header Image Credit:  Ecobank

Punch Newspaper is reporting that Ecobank NigeriaLimited has warned Flour Mills of Nigeria Plc against the proposed acquisitionof equity stake in Honeywell Flour Mills Plc, alleging that Honeywell GroupLimited, the parent firm, had not been paying up its loans from the bank.

The PUNCH had on Tuesday reported that a proposeddeal between Flour Mills of Nigeria and Honeywell Group where Flour Mills wouldbe acquiring 71.69 per cent of Honeywell Group's stake in its listedsubsidiary.

But a letter seen by our correspondent which wassigned by solicitors to Ecobank, Kunle Ogunba and Associates, and addressed tothe Managing Director of Flour Mills of Nigeria, cautioned the public andcorporate bodies on the "danger inherent in dealing in any shares of thecompany."

Ecobank said it had advanced several loanfacilities, which included working capital disbursements, to Honeywell FlourMills.

The bank said due to the failure of the company toliquidate the said loan facilities, it was constrained to commence winding up proceedingsagainst Honeywell Group Limited at the Federal High Court, Lagos in suit no:FHC/L/CP/1571/2015.

It said, "However, while the said action wasdismissed at the Federal High Court and the Court of Appeal, it is pertinent tostate that an appeal with appeal no: SC/700/2019 has been filed challenging thesaid decision at the Supreme Court (Notice of Appeal is herein enclosed andmarked as Annexure C).

"Hence, the effect of the above is that there iscurrently a winding-up action/proceeding pending against the said HoneywellGroup Limited."

The bank quoted a provision of Section 577 of theCompanies and Allied Matters Act 2020 as saying, "Where a company is beingwound up by the court, any attachment, sequestration, distress or execution putin force against the estate or effects of the company after the commencement ofthe winding-up is void..."

This, according to Ecobank, restricts HoneywellGroup from proceeding with the sale of Honeywell Flour Mills to Flour Mills ofNigeria.

It added, "Consequently, we hereby demand thatFlour Mills of Nigeria Plc, in its best corporate interest, immediately ceaseand desist from consummating the subject transaction, which aims to divest theassets of a company being wound up (Honeywell Group Limited).

Credit:

The post Loans:Ecobank Warns Flour Mills against Honeywell deal first appeared in Punchng.com on November 24, 2021.  

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