WorldStage Newsonline– Union Dicon Salt Plc, a Nigerian company that is into processing of crude salt on Wednesday released its audited financial statements for 31 December 2019 which showed that it is in a bad shape with zero revenue in 2018, 2019, loss after tax of N150,899,000 with net current liabilities and negative shareholders’ funds of N2,103,648,000 and N2,195,713,000 respectively during the year ended 31 December 2019.
Notwithstanding the results, the directors prepared the financial statements on a basis of accounting policies applicable to a going concern based on the assumptions and intentions of the Board members to rescue the company from bankruptcy.
Specifically, the audited financial statements of the company released at the Nigerian Stock Exchange also revealed that General Theophilus Yakubu Danjuma (Rtd), the Chairman of the Board and a key shareholder of the company, had agreed to provide the necessary financial support to maintain the company in continuous operating state and would not demand for the payment of N405.86 million due to him from the company in the subsequent 18 months from 31 December 2019.
Danjuma, a Nigerian general and politician who played a key role in the history of the country amassed an enormous fortune through shipping and petroleum. He was Chief of Army Staff from July 1975 to October 1979.
The issued share capital of Union Dicon Salt is held 28% by Aims Limited, 19% by Defence Industries Corporation, 14% by Danjuma T.Y, 8% by Taraba Fisheries Ltd, 8% by T.Y. Holdings Ltd, 1% by Danjuma Grace Elizabeth, 4% by UDS Plc (Staff Trust Fund) and 18% by others.
Besides Danjuma offers to inject additional funds, the company is said to be making moves to address the inability to generate revenue, impact of the negative working capital and net liabilities by entering into a joint venture arrangement with Joatalim Logistic Limited.
The arrangement is expected to fetch the company the sum of N180 million annually to sustain the administrative and other overhead costs.
The company is also said to be in discussion with BUA Group on the use of the Port-Harcourt factory/jetty for the production of salt and flour.
A successful deal with BUA Group is expected to lead the company back to the production of salt in the immediate future.
In the normal course of the business, the company had been hit by a number of legal suits in recent years which put its finances into jeopardy.
Specifically, a judgement was delivered at both the Lagos State High Court and the Court of appeal in the case of Abimbola Hundeyin V. (1) Mr. Archibong Nkana (2) Union Dicon Salt Plc (3) The Registrar of Titles; Lagos State Lands Registry. (Appeal No: CA/L/39M/11) where both courts awarded N10 million damages against Union Dicon Salt Plc. Also a judgement was delivered at both the Lagos State High Court and the Court of appeal in the case of Mr Augustine Omamegbe V. Union Dicon Salt Plc. (Appeal No: SC. 709/16) where the courts awarded N14,890,411damages against Union Dicon Salt Plc.
In 2017, the company lost in a suit with TAK Continental Limited and damages were awarded against the Company. TAK Continental Limited was granted to claim interest on the outstanding balance of N160,091,000 at 17% per annum from 1 November 2005 when the payment became due till the date of judgment and thereafter at 10% post-judgment interest rate from the date of judgment till the whole judgment sum is finally liquidated.
Dicon Salt Limited and Union Salt Limited were incorporated as private limited liability companies on 11 October 1984 and 30 May 1991 respectively. The Companies merged and simultaneously converted into a public limited liability company on 7 May 1993 to become Union Dicon Salt Plc. The Company became listed on the official listing of the Nigerian Stock Exchange on 23 September, 1993.
In 1998, the Company acquired 100% shares of Witt & Busch Limited. The cost of the investment was impaired in 2010 because there was no record of financial performance of the company to evaluate its profitability.
