The board of directors of First Aluminium Nigeria Plc yesterday explained that the aluminium company is seeking to delist its shares from the Nigerian Stock Exchange (NSE) because of inactivity on the shares of the company and inability of the current listing to help in realizing the corporate objectives of the company.
In a statement on the voluntary delisting, the company stated that the purpose for listing was to raise capital as well as provide liquidity to its shareholders but the current illiquidity nature of the market has rendered this primary corporate objective unattainable for the company.
According to the company, over the last 12 months, there has been a significant fall in average daily trading volumes to 2,918 shares between July 2017 and June 2018 and further dip to 2,816 shares between July 2018 and December 2018.
“Neither the company nor any shareholder is benefiting from the continued listing on the NSE. Furthermore, rationalization of operational expenses to support the company’s business and to meet the needs of various stakeholders as the attendant cost required to comply with its listing requirements including filing fees, penalties or sanctions, are not commensurate with the benefits to the company,” First Aluminium stated.
ALUCON Holdings SA, the majority core investor that holds about 75.48 per cent equity stake in First Aluminium Nigeria, is offering to buy out willing minority shareholders. Minority shareholders hold about 24.52 per cent equity stake in the company. ALUCON Holdings is offering to pay 55 kobo per share. Alternatively, shareholders can trade their shares on the NSE. However, a shareholder that desires to remain a shareholder of an unlisted First Aluminium Nigeria Plc shall be free to do so.
According to the company, over the past seven years, there have been little or no trading activity on the shares held by the minority shareholders while the share price was stuck at 50 kobo for about six years. It has since dropped further below nominal value.
“Shareholders are not benefitting from the continued listing as they are not getting exit opportunities and their investments have been locked up, thereby finding it difficult of their shareholding. Neither the company nor its shareholders have benefitted as the company’s shares continue to trade at a significant discount to the intrinsic value,” First Aluminium stated.
The company noted that the voluntary delisting will offer exit opportunities to shareholders who do not wish to remain in an unlisted public company.
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