FBN Holdings gives reasons it sells subsidiary despite declaring massive profit

• The reasoning behind the sale of FBN Holdings Plc's merchant banking division to EverQuest Acquisition LLP has been explained
• On Friday, FBN Holdings informed the NGX that it had sold EverQuest Acquisition LLP 100% of its equity
• Arogundade claims that the divestment has no effect on the company's continuing operations and only affects FBNQuest Merchant Bank

Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.

FBN Holdings Plc has given explanation on the rationale behind the sale of it merchant banking subsidiary to EverQuest Acquisition LLP.

The sale of a 100% equity stake in FBN Holdings' wholly-owned subsidiary to EverQuest Acquisition LLP was disclosed to the NGX on Friday. Photo Credit: FBN Holdings
Source: UGC

The Holding company disclosed the names of its other companies and ventures that were left out of the deal.

The Holdings' acting company secretary, Adewale Arogundade, provided the explanation in a notice delivered to Lagos' Nigerian Exchange Ltd. (NGX).

According to the News Agency of Nigeria (NAN), FBN Holdings notified the NGX on Friday about the sale of a 100% equity position to EverQuest Acquisition LLP in its wholly-owned subsidiary, FBNQuest Merchant Bank Ltd.

It stated that the sale and purchase agreement was contingent upon receiving permission from the appropriate regulatory bodies and that it was in line with its objective to optimise its portfolio within the group.

According to Arogundade, the divestment only concerns FBNQuest Merchant Bank and has no bearing on the ongoing business operations or strategic positioning of the group's other companies.

“We wish to clarify that all other entities and businesses listed below are not included in the divestment and they remain subsidiaries of FBN Holding and are well integrated into the group’s strategic focus.“These entities are: FBNQuest Capital Ltd., FBNQuest Asset Management Ltd., FBNQuest Trustees Ltd., FBNQuest Funds Ltd., and FBNQuest Securities Ltd.,” he said.

Notably, a divestment is when a business sells off all or a portion of its assets through a sale, exchange, closure, or bankruptcy. This is usually done to increase the business's value and achieve greater efficiency.

Divestment is a common strategy used by businesses to sell off non-core assets, giving their management teams more time to concentrate on the main business.

FBN Holdings presents impressive performance

Legit.ng reported that FBN Holdings reported gross earnings of N1.6 trillion in 2023, approximately 95.7% more than in 2022. During the same period, profit before taxes increased by 126.86% to N350.59 billion.

Even more robust development is demonstrated by the Q1 '24 results, with profit before taxes and gross earnings expanding by 325.15% and 181.43%, respectively, despite challenges brought on by higher operational costs and foreign exchange losses.

A thorough examination of the group's outcomes shows that, overall, things are looking up as financial ratios keep getting better.

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Source: Legit.ng