Vitafoam implements FG's regulation, cancels 1.14bn ordinary shares

Shareholders of a leading manufacturer of rigid foams and other household materials, Vitafoam Nigeria Plc have unanimously endorsed the company’s proposal to cancel 1,149, 155,936 unissued ordinary shares of 50 kobo each, in compliance with the Federal Government’s directive to all companies in Nigeria.

President Mohammed Buhari had on August 7, 2020, signed into Law, the amended Companies and Allied Matter Act (CAMA) of which Section 124 stipulates by December 31 this year, all companies in Nigeria should have only issued shares as against the current system of operating issued and authorised share capital.

Bamidele Makanjuola, Vitafoam’s Chairman, told the shareholders at the Company’s hybrid Extra-Ordinary General Meeting (EGM) that Vitafoam had no basis to issue new shares to the shareholders and cancellation of the shares was the best option after evaluation. He underscored the need to comply with the government’s directive ahead of the deadline, as a law-abiding corporate entity.

“After a careful evaluation of the various options, the Board decided that cancellation of the unissued shares is in the best interest of the company at the present time as there is no basis to issue shares. It is based on the foregoing that this Extra-Ordinary General Meeting was convened to seek your approval to cancel all the company’s unissued shares in compliance with the provisions of section 124 of the Companies and Allied Matters Act (CAMA 2020) and the Companies Regulation 2021 and to also amend some provisions of the Memorandum and Articles of Association of the company accordingly, ” says Makanjuola.

Although some shareholders pleaded that the Company should convert the unissued shares to bonus issues, others believed that the timing was too short. However, the cancellation of the unissued shares was approved at the EGM.

Iheanyi Nwachukwu

Iheanyi Nwachukwu, is a creative content writer with almost two decades journalism experience writing on banking, finance, capital markets, and tax. The multiple awards winning journalist is Assistant Editor, BusinessDay. Iheanyi holds BSc Degree in Economics from Imo State University; Master of Science (MSc) Degree in Management from University of Lagos. Iheanyi has attended several work-related trainings including (i) Advanced Writing and Reporting Skills (Pan African University, Lagos); (ii) News Agency Journalism (Indian Institute of Mass Communication {IIMC}, New Delhi, India); and (iii) Capital Markets Development and Regulations (International Law Institute {ILI} of Georgetown University, Washington DC, USA). Other trainings Iheanyi attended include: Economic/Political Risk Analysis (By Thomson Reuters Foundation); International Financial Journalism (IFJ) (By PMA Media Training, UK); Effective Business Writing Skills (By Phillips Consulting); Reporting on Corporate Governance (By International Finance Corporation (IFC) & Thomson Reuters Foundation UK); etc. In addition, he has participated in high-level economy & markets events in Dubai, South Africa, Morocco, and other African countries like Zambia, Ghana and Gambia.