CAP Plc explains recent asset stripping.
May 14th, 2008 Tunde Brown || tunde.brown@stockmarketnigeria.com
By Tunde Brown
The management of CAP Plc recently made public, its reasons for the reported massive asset striping embarked upon recently involving Saro Agro Sciences Limited located at Amuwo Odofin, Lagos. It would be recalled that despite the remarkable results in the year ending 2006/7 in which it declared a dividend that brings the total for the year to N3.75k, the company was reported to have disposed its Apapa Office, with the Ikeja office as the one remaining.
Explaining the reason behind the sale of its Household Property factory, manufacturers of Clenol toothpaste, Safe Cut Anti-bump Solution and Purit disinfectant amongst others to Saro Agro Sciences Limited, the chairman of the company Mr. Larry Ettah stated that it was due to consistent loss recorded over the years, which eroded the value of its coatings business. He noted that the decision was taken in 2006 after ‘robust debates and candid discussions involving the directors’, adding that, ‘…there was no point managing a diversified business portfolio with no relatedness and synergies in manufacturing, supply chain or marketing functions.’
At the Annual general meeting where these disclosures were made, the chairman stated that the total proceeds stood at N670 million. Cap plc, prior to 2007, was involved in three major categories of business namely: coatings and decorative paints, agro-chemicals and personal and household products. The company however disengaged from the Agro-chemicals business category in year 2003. Between 2003 and 2007, the company’s dividend had increased by over 650 per cent, from 50 kobo to N3.75k.
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