Following the decision of Tiger Brand, not to provide further financial support with respect to its investment in Tiger Branded Consumer Goods Plc (TBCG) formerly Dangote Flour Plc, Dangote Industries Limited (DIL) will be injecting N10 billion into TBCG.
This was part of the collective discussion between the parties involved in the transaction. 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.
According to a statement sent to the Nigerian Stock Exchange (NSE) on Monday, capital will be injected into TBCG in order to stabilise the business and place it on a sustainable path aimed at creating value for its stakeholders.
In return, Tiger Brands will divest its 65.7 percent 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.
Meanwhile the former directors of TBCG that resigned, Messrs Olakunle Alake, Arnold Ekpe and Asue Ighodalo have agreed to re-join the board of TBCG and have consequently been reappointed with effect from December 10th, 2015.
The statement noted that the terms of the transaction will be set out in a Share Sale and Purchase Agreement (SSPA), which the parties will enter into. The transaction and its terms have to be considered and approved by the Securities and Exchange Commission (SEC), in accordance with regulatory requirements.
The Parties will, as soon as is practicable, submit details of the Transaction and the SSPA to SEC for approval. Apart from the approval of the SEC, implementation of the Transaction will also be subject to the fulfillment of certain conditions precedent, including approval of the Exchange Control Division of the South African Reserve Bank, while a further announcement will be released upon implementation transaction.