Union Dicon Salt, Chaired By T.Y Danjuma Faces Insolvency As Company Battles Financial Crisis

Union Dicon Salt Plc’s going concern may be under threat as the company lacks the liquidity to sustain its business and also faces a chronic financial crisis.

Union Dicon Salt Plc is a Nigeria-based company that is engaged in the processing of crude salt. The company is also involved in the sale of packaged water in sachets and plastic bottles.

Findings by THE WHISTLER revealed that the issued share capital of the company is held by Aims Limited 28 per cent, 19 per cent by Defence Industries Corporation, 14 per cent by Danjuma T.Y, 8 per cent by Taraba Fisheries Ltd and 8 per cent by T.Y. Holdings Ltd.

Another 1 per cent is held by Danjuma Grace Elizabeth, 4 per cent by UDS Plc (Staff Trust Fund) and 18 per cent by others.

The company’s third quarter interim financial statement ending September 2023 and signed by the Chairman, LT. General T.Y. Danjuma (RTD), reveals that its revenue position over the past three years (2023, 2022 and 2021) have been zero.

The company posted just N63.4m profit as of Q3 2023 after declaring N134.9m loss in 2022.

At the end of the quarter, cash and cash equivalents which comprises cash on hand and demand deposits, as well as short-term, highly liquid investments that are readily convertible was just N58.36m.

The company’s net assets were negative N1.38bn by the end of Q3 from negative N1.39bn in December 2022, which shows that it is in critical condition and may ‘face liquidation’.

The company battles with negative equity of -N1.2bn in the period under review from -N1.5bn as of December 2022. This implies that the company has accumulated more debt than it can pay, even after liquidating all of its assets.

After accumulating losses over the years, Union Dicon’s revenue reserves were negative N1.6bn, making it impossible for the company to pay dividends.

Confirming THE WHISTLER findings, the company admitted in its books that it faces a working capital crisis and a worrisome negative net asset.

The company wants to return to profitability as it scouts for investors. The company may not repay amounts due to related parties anytime soon until it begins to make profit.

Union Dicon said, “As part of the measures to sustain the going concern, the Company has entered into a joint venture arrangement with Joatalim Logistic Limited. This arrangement currently fetches the sum of N230 million annually to sustain the administrative and other overhead costs. The company is of the view that it will continue to operate for the foreseeable future.

“Proper attention is focused on the impact of the negative working capital and net liabilities respectively. To facilitate this, the management is committed to engaging in productive activities this year with the approval of the Board to revive salt production and diversify into other business opportunities.

“As part of the measures to sustain the going concern, the amount due to the related parties will not be required for immediate repayment until the Company returns to a profitable position. “