Shareholders of food beverages and confectioneries giant- Nestle Nigeria Plc, on Tuesday rose from its 49th Annual General Meeting (AGM) in Lagos, with a challenge that the directors consider various options of share splits or bonus issues, while intensifying efforts to significantly reduce the mountain of unclaimed dividend in its books.
According to one of the shareholders, T.O Adegboye, said the directors last issued bonus shares in 2011, noting that the time was ripe for another, a situation that would create more value for the company and its shareholders.
Also speaking, Nona Awoh, a shareholder, while supporting the call, drew attention to the company’s N44.3bn retained earnings, which would likely hit N50bn next year. He related this to the company’s N0.4bn paid up capital, representing 11x the paid-up capital.
Nestle Nigeria’s N1,600 per share, he argued, is the creation of the minority shareholders who keep buying and selling, rather than the efforts of Nestle S.A. Switzerland with 66.18% stake that is never traded. This is why, he continued, the board should consider a bonus of 1:5; 1:4; or 1:3.
Any of these options, he continued, “gives room for growth (in share price value growth for shareholders); the company’s market capitalization will go up and your ranking will improve… And then, you take benefit for what you are not party to creating,” he assured the board and management.
Joining his voice to the clamour for bonus issue, Chief Timothy Adesiyan, immediate past President of the Nigerian Shareholders Solidarity Association (NSSA) argued that the directors could equally consider a 1:1.
Awoh equally charged the board to consider appointing a director to represent the 28,800 investors in the company who together control 38.8% stake.
While also expressing dissatisfaction with the situation where only the chairman holds shares in the company among the board members, Awoh said: “Nigerians must have a say in how the company is run. You have independent directors, no problem. Others represent the majority (core investor- Nestle S.A.).”
The shareholder also urged the company to charge technical agreement fees from the profit, adding: “What you are charging us in Nigeria… you can’t charge in China even with their huge population.
There is need for the board to consider increasing export earnings by selling products to neighbouring countries such as Togo, Ghana, Senegal and Chad, “instead of the situation where Nestle S.A. supplies directly to them.
On unclaimed dividend, he called on management to design a strategy that would enable the company reach owners of such, lamenting the that N1.72bn in unclaimed dividend “is a lot of money to leave with the registrars.
“You must tell us how much we are earning from that” fund, he challenged the board.
Responding, chairman of the company, David Ifezulike, said to issues raised would be duly considered by the board, assuring that directors have demonstrated sufficient interest and represent all shareholders even without shareholding.
The technical agreement fees, he continued, is in line with what was approved by the licencing authorities.