Greek multimillionaire businessman John Coumantaros has recorded a multimillion-dollar loss in his wealth in the past 41 days, as the market value of his stake in Nigeria’s leading agro-allied group, Flour Mills of Nigeria, declined by N4.9 billion ($12 million).
Flour Mills of Nigeria is Nigeria’s market leader in flour and flour-product marketing and production, and one of Nigeria’s largest consumer goods companies listed on the Nigerian Exchange, with a market capitalization of $283 million (N117 billion).
Coumantaros, the Nigeria-based Greek businessman who is the chairman of Flour Mills Group, holds a significant 63.3-percent stake in the agro-allied group through Excelsior Shipping Company Limited.
The multimillion-dollar loss in Coumantaros’ stake can be linked to investors reacting to Flour Mills’ decision to take over Honeywell Flour Mills from Honeywell Group, a leading Nigerian investment holding founded by multimillionaire industrialist Obafoluke Otudeko.
Since Flour Mills of Nigeria signed a definitive deal to acquire a majority stake in the miller on Nov. 22, its share price has lost more than five percent of its value, as wary investors trimmed down their positions in the group.
Research conducted by Billionaires.Africa revealed that the share price of Flour Mills of Nigeria has dropped from N30.2 ($0.0735) on Nov. 16, 41 days ago, to N28.3 ($0.0689) as of the time of the drafting of this report. This translates to a 6.3-percent loss for shareholders.
As a result, the market value of Coumantaros’ 63.3-percent stake slumped from N78.4 billion ($190.9 million) on Nov. 16 to N73.5 billion ($178.9 million), accruing losses of N4.9 billion ($12 million) for the multimillionaire businessman in 41 days.
The conservative move by investors that led to the slump in the miller’s share price can be linked to concerns about the group’s debt profile upon the deal’s completion.
As of Sept. 30, Honeywell Flour Mills had a total debt of N78.53 billion ($191.1 million), broken down into N19.50 billion ($47.45 million) of long-term debt, with a payment date of more than a year, and N59.03 billion ($143.66 million) of short-term debt, payable within a fiscal year.
With a total of N52.68 billion ($128.2 million) in cash holdings, Flour Mills might have to fund the transaction through debt funding. This is expected to add to the group’s debt portfolio, which is above the N140-billion ($340 million) mark.