Tiger Brands of South Africa agreed to sell its major Nigerian food business investment to Aliko Dangote but what was in the mind of the richest African was actually to save more than 3000 Jobs in Nigeria . . .
Dangote buys back former subsidiary to save over 3,000 jobs
Dangote Industries Limited (DIL)’s decision to buy back its former subsidiary, Tiger Branded Consumer Goods (TBCG) was informed by the need to prevent the company from going under and save over 3,000 jobs of Nigerians.
DIL was approached by Tiger Brands to acquire its 65.7 per cent shares of TBCG Limited. While some stakeholders have questioned the rationale behind the investment decision by DIL, sources close to the Dangote Group said the company had to consider the repurchase of TBCG so as to keep the company as a going concern, which preserves value for the minority retail shareholders. The move also secured direct employment for over 3,000 employees.
“Going by every indication, the future of the company was very doubtful and that was risky for the employees which are over 3,000 Nigerians apart from others who benefit from the company’s services through other ancillary services. The return of DIL is therefore a big relief and good decision to save the jobs of the staff of TBCG,” a market operator said.
According to the repurchase agreement, subject to regulatory approvals, DIL will provide TBCG with an immediate cash injection of N10 billion. In return, Tiger Brands will divest its 65.7 per cent shareholding in TBCG to DIL for a nominal consideration and write off its shareholder loans to TBCG.
In addition, Tiger Brands will assume and settle outstanding debt guaranteed on behalf of TBCG.
Already, the former directors of TBCG, Alake, Ekpe and Ighodalo have agreed to re-join the board of TBCG and have consequently been reappointed with effect from 10th December 2015.
The companies have explained that the transaction will ensure that TBCG is maintained as a viable going concern, able to retain its employees and meet its obligations to its stakeholders.
“The Transaction envisages that sufficient capital will be injected into TBCG in order to stabilize the business and place it on a sustainable path aimed at creating value for its stakeholders,” they said.