How losses forced UAC Nigeria to liquidate warm spring waters
A sign of warning may have emerged from recent action by UAC Nigeria Plc, for companies who hold on to loss making subsidiaries, as UAC liquidates holdings in Gossy water.
The impact of establishing concerns far from the target market or where infrastructures are in deficit have been linked as part of the reasons for the ongoing dissolution process of Warm Spring waters Limited, a 76 per cent held subsidiary of UAC group.
BusinessNews West Africa recalls that, shareholders of Warm springs waters Nigeria Limited, , makers of Gossy water at a meeting which held on February 6th 2018, endorsed for the appointment of a liquidator, to wind up the company’s affairs and share assets to shareholders.
The dissolution of the co company becomes imperative, hence it has been operating at a loss and making below one percent contribution to the UAC group results on annualised basis.
To this effect, UAC has notified the general investing public and the capital market regulators that following developments relating to its 76 per cent subsidiary holdings based in Ikogosi Ekiti, Warm spring Waters Nigeria Limited, the company has been slated for liquidation.
Warm Spring waters Nigeria Limited, was promoted in 2002 by UAC, Ekiti state government, Ikogosi Ekiti community and some private investors to produce to produce premium quality spring water under the “Gossy”” label.
The company said in a statement signed by Godwin A Samuel, company secretary and legal adviser, said that since the company commenced operations in 2003, it has been delivering weak operational performances due to challenges emanating from its rural location of the plat at the source of the spring as well as associated logistic challenges which include 100 per cent reliance on company generated power and difficult operating environment.
“the contribution of the company to the group’s result is less than 1 per cent as it delivered a turnover of N369 million and a loss of N78 million I n nine months ended 30th September 2017”” the company revealed.
Cross section of stakeholders have lauded the liquidation to cushion loss impact on the group, as they cautioned companies to curtail losses by disposing unprofitable subsidiaries which eats deep into shareholders’ funds.
Stories by Bonny Amadi
