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Honeywell shareholders endorse internal restructuring

By The Citizen
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Shareholders of Honeywell Flourmills Plc have endorsed the special resolution seeking to restructure some of the company's activities.

Specifically, the shareholders, at a court-ordered meeting in Lagos on Thursday, endorsed the bid by the company to convert Honeywell Superfine Foods Limited, a wholly owned subsidiary of Honeywell Flour Mills Plc, into a division of HFMP.

Giving the rationale for the decision, the Chairman, HFMP, Dr. Oba Otudeko, informed the shareholders that even though both companies had hitherto enjoyed certain synergies as a result of their forward/vertical alignment, there was still considerable scope for the derivation of other benefits with further integration.

He said, 'To further enhance shareholder value, an internal restructuring of the HFMP is required to optimise operational efficiencies, reduce costs and extract more synergies from HSFL and its parent company, HFMP.

'After absorption, the resultant entity will benefit from more efficient allocation of resources from the streamlining of support functions like marketing, logistics, information technology, human resource management and finance.'

Honeywell Superfine Foods, which was acquired by HFMP in 2008, is the third largest producer of pasta and noodles in the country with brands like Honeywell Noodles, Honeywell Spaghetti and Honeywell Macaroni.

Otudeko explained that the internal restructuring was expected to be completed in March 2013.

Speaking on the restructuring, the President, Independent Shareholders Association of Nigeria, Mr. Sunny Nwosu, commended the management of the company for its efforts to entrench good corporate governance in its operations, adding that the restructuring exercise was a strategic plan to eliminate duplication of activities.

He also said it would enable the company to enhance speedy decision making, as well as optimise the balance sheet since the subsidiaries were wholly owned by HFMP.

Nwosu explained that investors were looking at areas of making more profit and value for shareholders, adding that the exercise would bring good dividends to shareholders.

'We are expecting that this idea will translate into a better dividend to the shareholders because whatever they are able to save from the duplication of functions will now go into Honeywell and increase its portfolios,' he said.

The National Coordinator, Progressive Shareholders Association of Nigeria, Mr. Boniface Okezie, said the conversion would add value to shareholders and enhance dividend payment.

He said, 'We believe that this move will make our company even stronger in the years to come. Our holdings remain intact and we are not reconstructing shares. I commend the board and management for the decision because the restructuring will enhance efficient savings through consolidation of duplicate functions.'

'Bringing it to a division will reduce duplication of functions by these other subsidiaries, because as it looks at the moment, most of the functions are cross functions. So, it will definitely reduce expenditure as a result of the cross function and bring synergy.'