The number of companies listed on the Nigerian Stock Exchange (NSE) will further reduce as Newrest ASL Nigeria Plc has applied for voluntary delisting from the exchange. Newrest ASL Nigeria Plc has through its Stockbroker, Helix Securities Limited, submitted an application for voluntary delisting of the entire 634million ordinary shares of the company from the exchange.
According to the company, the voluntary delisting was as a result of its inability to meet up with the 20% free float requirement of the exchange.
In line with the provisions of Rule 1.10 of the Rules for delisting of equity securities from the exchange, which states that issuer shall set aside funds sufficient to purchase the interest of all shareholders who expressed their dissent to the resolution to de-list the issuer and the funds shall be domiciled with a Registrar or a Custodian duly registered by and in good standing with the Securities and Exchange Commission, broker said Newrest ASL Nigeria Plc has opened and deposited sufficient funds to settle minority shareholders in an Escrow Account with Zenith Bank Plc.
Some market operators and shareholders have expressed shock at the decision of the company to delist considering the fact it just released a highly impressive results and declared a dividend. Newrest ASL Nigeria Plc posted a revenue of N5.425 billion for the year ended Decembr 31, 2018, showing an increase of 38 per cent compared with N3.92 billion in 2017. Profit after tax tax (PAT) soared by 285% from N386 million to N1.48 billion. The company recommended a dividend of 20 kobo per share.
The application of Newrest ASL Nigeria Plc to delist is coming on the heels of the delisting of Great Nigeria Insurance Plc.
The insurance firm was delisted on January 25, 2019. Explaining the factors that informed the decision to delist, GNI had said that over the last five years, there was little or no trading activity on the shares held by the minority shareholders.
“There has also been a considerable fall in trading volumes over the last 12 months with an average daily volume of 1, 200 units during the period March 2017 to March 2018. Shareholders are not benefiting 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. Neither the company has benefitted as the company’s shares continue to trade at a significant discount to the intrinsic value.