Ecobank warns FMN against Honeywell acquisition deal

Ecobank Nigeria has warned Flour Mills of Nigeria, (FMN) not to proceed with its planned acquisition of 71.69 percent of Honeywell Group Limited (HGL) stake worth N80 billion, saying the company is indebted to the bank and facing winding-up proceedings.

The warning was issued in a statement by the bank through its counsel, Kunle Ogunba & Associates, titled “Purchase of Honeywell Group Limited’s 71.69percent stake in Honeywell Flour Mills Limited- Caveat Emptor” where it highlighted the danger inherent in dealing in any shares of the company.

“Honeywell Group Limited is legally estopped from sequestering and/or disposing of any of its assets pending the final determination of the winding-up action commenced against it; also of importance is the provision of “CAMA” that any such transaction is void ab initio.

“Consequently, we hereby demand that Flour Mills of Nigeria Plc in its best corporate interest immediately cease from consummating the subject transaction which aims to divest the assets of a company being wound-up (Honeywell Group Limited),” it stated.

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Ecobank said it had advanced several loan facilities, which included working capital disbursements, to Honeywell Flour Mills.

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

It added that when a company is being wound up by the Court, any attachment, sequestration, distress, or execution put in force against the estate or effects of the company after the commencement of the winding-up is void.

“Please be further informed that the assets of both Honeywell Group Limited and Honeywell Flour Mills Plc are the subject of the winding-up action and thus based on the doctrine of “lis-pendens”(in addition to the provisions of CAMA supplied above) you are advised to refrain from dealing with the subject asset which forms part of the subject matter of litigation,” it added.

Details later ……