Africa’s richest man Aliko Dangote and three other directors resigned from the board of Dangote Flour Mills on Monday as majority owner Tiger Brands cut funding support to its struggling Nigerian division.Thank you for reading this post, don't forget to subscribe!
South Africa’s Tiger Brands said it was “currently exploring various alternatives with regard to its investment in Dangote Flour Mills, which also announced a change of name to Tiger Branded Consumer Goods Plc.
Aliko Dangote holds 10 percent of the company’s equity in through Dangote Industries. The other directors who resigned are Olakunle Alake, Asue Ighodalo and Arnold Ekpe.
Meanwhile Tiger Brands Ltd. rose the most in seven years after South Africa’s largest food producer said it won’t provide further financial assistance for its struggling Nigerian unit.
The maker of Jungle Oats and Black Cat peanut butter gained as much as 7.9 percent, the most since October 2008, and was up 7.5 percent at 334.37 rand by 2:07 p.m. in Johannesburg.
“Tiger Brands is currently exploring various alternatives with respect to its shareholding” in the Nigerian unit Dangote Flour Mills, the company said in a statement Monday.
It had warned investors in May the company may need to raise finance for Dangote through a sale of shares after writing down 954 million rand ($66 million). The food producer bought Lagos-based Dangote Flour Mills for about $150 million in 2012.
“The business has been losing a lot of money; there’s a lot of debt in Dangote Flour,” Anthony Geard, an analyst at Investec Ltd. in Cape Town, said by phone. “If Tiger walks away from it they’re walking away from a big liability and ongoing losses.”
Chief Executive Officer Peter Matlare said in September he would step down at the end of the year.