By Goddy Egene
Vono Products Plc will be delisted from the Nigerian Stock Exchange (NSE) following its planned merger with Vitafoam Nigeria Plc, The Exchange said at the weekend. It said, preparatory to the delisting, trading on the shares of the Vono would be suspended from this Monday.
According to the NSE, Vitafoam and Vono Products have obtained Court’s sanction of their scheme of merger effective March 11, 2016.
“At the conclusion of the merger process, Vono Products Plc will be dissolved and de-listed from the Daily Official List of the NSE. Dealing Members and all stakeholders are hereby notified that effective Monday, 21 March 2016; trading on the shares of Vono Products Plc will be suspended on the floor of The Exchange. Transactions on Vitafoam Nigeria Plc will however, continue as it will become the surviving entity from the merger of the two companies. This is in line with Rule 21.1: Suspension, Cancellation and Withdrawal of Listing, Rulebook of the NSE,” the exchange said.
Vono Products Plc had reported a loss of N102 million for the year ended September 30, 2015, compared with a loss of N11.9 million in 2014. Also, the company ended the period with a negative working capital of N645 million, a development that made the company’s auditors, Ernest & Young to raise doubt about its continuing as a going concern.
Vitafoam Nigeria had in August 2010 acquired majority shareholding in Vono Products and took over the board and management of the company. Vono Products in 2012 launched a N840 million rights issue to strengthen its operations and pursue expansion programme as part of efforts to emplace the company on the path of sustainable profitability.
The Group Managing Director, Vitafoam Nigeria Plc, Mr. Taiwo Adeniyi recently said merger of the two companies would create better values for shareholders and enhance the long-term competitiveness of the larger company.
According to him, the shareholders of the two companies voted in favour of the merger because of potential benefits such as economies of scale, cost savings and improved operational and administrative efficiencies among others.
“If we produce foam and Vono produces furniture, they are complementary. It is a strategic decision for Vitafoam to have Vono as a subsidiary. As you are aware, we have other subsidiaries such as Vitabloom, Vitagreen and Vitapur. Each of them produces distinct products. But they have something in common and this defines the unity of purpose,” Adeniyi said.