Honeywell investors allegedly lose N3.17bn over Ecobank warning

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Honeywell Flour Mills Plc (HFMP) investors reportedly lost N3.17 billion as Ecobank Nigeria scared the capital market away from the consumer foods manufacturer amid acquisition from Flour Mills of Nigeria (FMN).

Ecobank had warned the capital market against investing in Honeywell stock, stating that it had a lawsuit against the firm, which might lead to the winding up of Honeywell’s


Both Honeywell and Ecobank have been in a legal battle over an unpaid debt of N5.5 billion. The debt is owed by Anchorage Leisures Limited, Siloam Limited, and Honeywell Flour Mills Plc, according to majority stakeholder in Honeywell, Oba Otudeko.

He told the Appeal Court that as of December 12, 2013, his firms had paid N3.5 billion, which the billionaire stated was the full and final payment for the N5.5 billion debt, which both parties agreed on during a meeting on July 22, 2013.

Ecobank had lost two cases at the Federal High Court and the Court of Appeal, but the lender had filed an appeal with appeal no: SC/700/2019, to challenge the decisions of the lower court at the Supreme Court.

Following the warning against purchasing or holding shares of Honeywell, the manufacturer’s stock value tanked to N3.69kobo per share from N4.09 as fear gripped the market which has been swaying positively towards HFMP.

Investors holding stocks of the flour firm lost N3.17 billion as share dump pulled down value by 9.77 percent between Tuesday and Wednesday trading sessions, days after Ripples Nigeria reported Honeywell Flour shareholders gained N2.61 billion from the acquisition announcement.

Analysis showed that the 9.77 percent decline caused total shareholder investment to drop to N29.26 billion on Wednesday, from N32.43 billion of Tuesday, as excitement on the stock faded amid Ecobank threat to seize business assets of Honeywell.

Wednesday’s loss wiped the N2.61 billion gain Honeywell investors had amassed in the capital markets three days earlier.

Meanwhile, Flour Mills of Nigeria Plc has assured its stakeholders that its recent acquisition of a majority stake of about 71.69% in Honeywell Flour Mills Plc did not breach any subsisting court order.

The company insisted that the deal was struck after necessary due diligence and obtaining appropriate legal guidance.

It said the assurance became necessary on the heels of the warning by Ecobank to Flour Mills of Nigeria Plc. to desist from acquiring Honeywell Flour Mills Plc.

The bank claimed that Honeywell Group Limited (the parent company of Honeywell Flour Mills) had not been servicing its loans with the bank.

Consequently, on its failure to liquidate its loan facilities, the bank stated that it was constrained to commence winding-up proceedings against the parent company at the Federal High Court, Lagos in suit no: FHC/L/CP/1571/2015.

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