FOLLOWING worsening economic downturn and attempts by debtors to liquidate Nigeria’s premier foam product company, Vono Products Plc through receivership, Vitafoam Nigeria Plc has acquired 25 per cent equity in the metal, wooden furniture and foam mattresses firm in a strategic alliance that would resurrect the fortunes of the company and raise stakes in the foam finished products.
The deal, which was formally announced last week by the parties, is anchored on increasing value of stakeholders, reduce operational cost and grow revenue and enhance the profitability of the partners in the alliance.
In 1960s and 1970s, Vono enjoyed great patronage and tremendous market share in its core product line of innerspring mattresses, divans and double bunk beds. The brand Vono was so popular that it became a generic name for beds and mattresses. This trend continued until tow decades ago when the fortunes of Vono nosedived due to a combination of factors, including poor management, economic downturn in the country, which reduced the purchasing power consumers and governments’ neglect of institutions such as schools, prisons and police- major consumers of double bunk beds.
The climax was reached late last year, when Bank PHB filed a winding up petition against Vono Products Nigeria Plc on the ground that the company is insolvent and unable to pay its debt of N54 million and therefore prayed the court that Vono Products, be wound up by the order of the court in accordance with the provision of Sections 409 (1) and 410 (1) of Companies and Allied Matters Act.
The Managing Director, Vono Products, Mrs. Titilola Bakare who confirmed the development at a media parley in Lagos said that their coming together will translate to greater successes for each organization that would maintain their distinct identities to the ultimate advantage of stakeholders.
She announced that the company has expended N500 million on turnaround maintenance, and plans a N1billion recapitalisation through a right issue of N1.60 kobo for existing shareholders for a total of N525 units. “As part of our financial repositioning agenda, plans are at advance stage to raise more funds from existing shareholders of the company through a right issue of share expected to hit the market before the end of the current quarter. It is expected existing shareholders will leverage on this opportunity to enlarge their stake in readiness for the good days that is now within reach.”
Vitafoam Technical Director, Mr. Ajiga Joez disclosed that key areas of working together will involve information sharing, development of new ideas and leveraging on their deep understanding of the business and the Nigerian market. “Our robust distribution channels will play a key role in this alliance. This relationship will help Vono to concentrated more on their areas of strength, which is mainly inner spring beds, metal furniture and wooden furniture. Vitafoam will strive to make Vono regain her lost market share.”
The Vitafoam’s company secretary and legal adviser, Mr. Lekan Sanni explained that the deal is far from acquisition as the board of Vitafoam has set a maximum target of investment and the company is only one of the investors in Vono.
Vono was incorporated in Nigeria as Vono Metal Products West Africa Limited on October 5, 1960 with the main objectives of meeting domestic and institutional needs of homes, schools, hospitals and various establishments in terms of metal furniture and packaged beds. The name was changed to Vono Products on February 2, 1965, when the company diversified into the production of wooden furniture and foam mattresses.
Click to signup for FREE news updates, latest information and hottest gists everydayThe deal, which was formally announced last week by the parties, is anchored on increasing value of stakeholders, reduce operational cost and grow revenue and enhance the profitability of the partners in the alliance.
In 1960s and 1970s, Vono enjoyed great patronage and tremendous market share in its core product line of innerspring mattresses, divans and double bunk beds. The brand Vono was so popular that it became a generic name for beds and mattresses. This trend continued until tow decades ago when the fortunes of Vono nosedived due to a combination of factors, including poor management, economic downturn in the country, which reduced the purchasing power consumers and governments’ neglect of institutions such as schools, prisons and police- major consumers of double bunk beds.
The climax was reached late last year, when Bank PHB filed a winding up petition against Vono Products Nigeria Plc on the ground that the company is insolvent and unable to pay its debt of N54 million and therefore prayed the court that Vono Products, be wound up by the order of the court in accordance with the provision of Sections 409 (1) and 410 (1) of Companies and Allied Matters Act.
The Managing Director, Vono Products, Mrs. Titilola Bakare who confirmed the development at a media parley in Lagos said that their coming together will translate to greater successes for each organization that would maintain their distinct identities to the ultimate advantage of stakeholders.
She announced that the company has expended N500 million on turnaround maintenance, and plans a N1billion recapitalisation through a right issue of N1.60 kobo for existing shareholders for a total of N525 units. “As part of our financial repositioning agenda, plans are at advance stage to raise more funds from existing shareholders of the company through a right issue of share expected to hit the market before the end of the current quarter. It is expected existing shareholders will leverage on this opportunity to enlarge their stake in readiness for the good days that is now within reach.”
Vitafoam Technical Director, Mr. Ajiga Joez disclosed that key areas of working together will involve information sharing, development of new ideas and leveraging on their deep understanding of the business and the Nigerian market. “Our robust distribution channels will play a key role in this alliance. This relationship will help Vono to concentrated more on their areas of strength, which is mainly inner spring beds, metal furniture and wooden furniture. Vitafoam will strive to make Vono regain her lost market share.”
The Vitafoam’s company secretary and legal adviser, Mr. Lekan Sanni explained that the deal is far from acquisition as the board of Vitafoam has set a maximum target of investment and the company is only one of the investors in Vono.
Vono was incorporated in Nigeria as Vono Metal Products West Africa Limited on October 5, 1960 with the main objectives of meeting domestic and institutional needs of homes, schools, hospitals and various establishments in terms of metal furniture and packaged beds. The name was changed to Vono Products on February 2, 1965, when the company diversified into the production of wooden furniture and foam mattresses.
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