Following Monday’s approval at an extra-ordinary general meeting, the board of AshakaCem Plc, on Thursday wrote the Nigerian Stock Exchange (NSE) on its proposed voluntary delisting as recommended.
A letter to the NSE titled “Public notice to shareholders of AshakaCem Plc on the proposed voluntary de-listing of AshakaCem Plc from the Nigerian Stock Exchange,” said the exit consideration is open between December 19, 2016 and March 17, 2017, for shareholders willing to benefit from the more diversified earnings of Lafarge Africa Plc
To exit before the delisting, shareholders can trade their shares on the NSE through their nominated stockbroker; or receive consideration from Lafarge Africa Plc by way of 57 new Lafarge Africa shares for 202 AshakaCem shares held as at the date of the Special Resolution approving the voluntary delisting. There is also the cash consideration of N2 per share additional cash consideration, which will be paid to every shareholders exchanging their AshakaCem shares for Lafarge Africa shares.
On reason for the voluntary delisting, the statement signed by Zainab Silas-Umaru, the company secretary, recalled that “over the last five years, there is little or no trading activity with only 0.20 per cent of the shares held by the minority shareholders being traded.”
The NSE rule requires listed companies to maintain a minimum free float (percentage of their shares held by minority shareholders and therefore available for trading) for the set standards under which they are listed in order to ensure that there is an orderly and liquid market for their securities. For instance, the free float requirement for companies on the Main Board is 20 per cent and 15 per cent for Alternative Securities Exchange Market (ASEM) companies.
It further noted that “there has also been a measurable fall in trading volumes over the last 12 months from 200,090 units in 2015 to 77,810 units in the same period in 2016.”
In all of this, the company lamented that neither it nor the “shareholders are benefitting from the continued listing as shareholders are not getting any exit opportunity and their investments have been locked up and they find it difficult to dispose of their shareholding.
“Moreover, the company is bearing unnecessary cost in complying with its listing obligations,” it further lamented.
AshakaCem, formerly Ashaka Cement Plc was incorporated in August 1974 and started cement production and marketing in September 1979 as Ashaka Cement Company Limited with registered office in Gombe, Gombe State.