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 to save over 3,000 jobs for Nigerians.
DIL was approached by Tiger Brands to acquire its 65.7 per cent shares of TBCG Limited as some stakeholders questioned the rationale behind the investment decision by DIL. But the Dangote Group said it considered the repurchase of TBCG so as to keep the company as a go- ing concern and to preserve value for the minority retail shareholders. The move also secured direct employment for over 3,000 employees.
“Going by all indications, the future of the company was very doubtful and that was risky for its over 3000 Nigerian employees apart from
others who benefit from the company’s services through other ancillary services. The return of DIL was 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 December 10, 2015.
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