Union Bank, Oando and 5 Other Major Companies Delisting From NGX in 2023
Over the years, companies have continued to list and delist on Nigeria's stock exchange (now known as Nigerian Exchange Limited or NGX) for one reason or another. This year, once stalwarts of the exchange, some notable companies have opted to delist and redefine their financial trajectories.
Delisting is when a company voluntarily removes its shares from the stock exchange, effectively becoming a private entity.
Source: UGC
This decision can have various implications, sparking discussions about the motivations behind such moves and their potential impact on the Nigerian capital market.
In this listicle, Legit.ng unveils the top seven companies that have bid farewell to the stock exchange this year, leaving an indelible mark on the nation's financial narrative.
Union Bank
After an extensive 52-year presence on the Nigerian stock market, Union Bank of Nigeria Plc declared its decision to delist from the NGX.
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This follows the completion of the acquisition of the majority shareholding of the bank by Titan Trust Bank Limited.
As disclosed in a corporate filing on the NGX website and reported by Legit.ng, Titan Trust Bank Limited intends to offer N7.70 per share for the remaining shares, aiming to secure a 100% ownership stake in Union Bank of Nigeria.
GlaxoSmithKline (GSK)
A few months ago, GlaxoSmithKline (GSK) UK Group, a prominent British pharmaceutical company, announced its decision to conclude its activities in Nigeria and subsequently withdraw from the NGX.
The company, having established its presence in Nigeria in 1971, cites the challenging economic conditions in the country as the primary reason for its departure.
GSK aims to discontinue its operations in Nigeria but plans to transition these responsibilities to a third-party entity.
Oando Plc
Oando Plc's board recently revealed its contemplation of pursuing the voluntary delisting of its shares from the NGX.
This prospective move is contingent on the approval of ongoing initiatives to acquire the 42.63% minority shares from Ocean and Oil Development Partners Limited (OODP), a decision that awaits the consent of all minority shareholders during a court-ordered meeting.
Following delisting, the company aims to undergo re-registration as a private entity.
PZ Cussons Nigeria Limited (PZ)
PZ Cussons Nigeria Limited (PZ) is set to withdraw from the NGX, with its parent company, PZ Cussons (Holdings) Limited, proposing a buyout of minority shareholders at a price of N21 per share.
According to an announcement on the company's website, the predominant shareholder, PZ Cussons (Holdings) Limited, has expressed its intention to procure all outstanding shares from minority shareholders using a scheme of arrangement.
Ardova Plc
Ardova Plc, a prominent energy company, has concluded its 53-year listing on the Nigerian exchange.
This move marks the conclusion of its listing that originated with African Petroleum's admission to the Nigerian stock market.
Ardova's delisting from NGX is in accordance with the approved Scheme of Arrangement between Ardova and the holders of its fully paid ordinary shares of 50 Kobo each.
This arrangement received the endorsement of the Securities and Exchange Commission (SEC) and was sanctioned by the court.
Capital Hotels Plc
Capital Hotels Plc officially announced the removal of its shares from the primary board of the NGX.
In a detailed statement submitted to The Exchange, the company clarified that the decision to delist is motivated by a desire to actively pursue strategic opportunities.
Emphasizing the potential benefits, the company highlighted that the delisting will facilitate strategic planning for enhanced performance, cost reduction, and increased competitiveness within its industry.
Coronation Insurance Plc
Coronation Insurance Plc also intends to withdraw from the NGX, prompted by an acquisition proposal from Coronation Capital (Mauritius) Limited.
The offer entails the acquisition of shares at a rate of 65 kobo per share.
This potential acquisition is contingent upon obtaining regulatory approval as stipulated by section 715 of the Companies and Allied Matters Act, No.3 of 2020, and other pertinent rules and regulations.
Delisting negatively impacting investments
Chuks Chukwura, a Lagos-based stockbroker spoke about the recent delistings of companies from the stock exchange.
He told Legit.ng that one of the reasons for this could be the fact that the operational expenses in Nigeria are escalating significantly.
He said:
While the market allows for unrestricted entry and exit, the frequent delisting is negatively impacting our investments, resulting in shareholders being disadvantaged.
We can not deny that the cost of doing business in Nigeria is increasing every day. These challenges encompass a spectrum of factors, including forex complications, acquiring raw materials, managing logistics, and contending with taxation-related issues.
Agreeably, the reasons for delisting companies from the NGX are usually influenced by a myriad of factors, including escaping regulatory constraints and addressing financial difficulties.
Whatever the case, ensuring that Nigeria's stock exchange remains an attractive and competitive marketplace for issuers and investors is essential.
Meet 7 richest women on Nigerian stock exchange with investment worth over N23bn
In related news, Legit.ng reported that the positive performance of the NGX led to a notable increase in the wealth of seven Nigerian women who have emerged as the wealthiest female investors on the exchange.
Their substantial fortunes are attributed to the favourable valuation of their shares in various companies.
Among these accomplished women are Awelu Elumelu, Abolanle Matel Okoh, Ifeoma Esiri, Adaora Umeoji, Olufunmilola Ayebae, Joy Teluwo, and Nneka Onyeali-Ikpe.
As of the conclusion of trading in September 2023, the collective value of their investments exceeded N23.163 billion.
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Source: Legit.ng
