Authorities at the Nigerian Stock Exchange (NSE) have conceded a request for voluntary delisting by First Aluminium Nigeria Plc, signaling the end of 27 years of trading on the shares of the aluminium manufacturing company.
A document obtained by The Nation indicated that the NSE has approved the application for voluntary delisting filed by First Aluminium Nigeria.
With the approval of the delisting, the NSE will today place the shares of the company on full suspension preparatory to the delisting of the entire issued share capital of First Aluminium Nigeria from the Daily Official List of the Exchange. On full suspension, there will be neither trading nor movement of price of the shares of the company.
In a circular on the full suspension of trading, the Exchange stated that the suspension was in “preparation for the voluntary delisting of the issued share capital of First Aluminium Nigeria”.
“In view of the above, the shares of the company will be placed on suspension effective, Wednesday, 15 May 2019,” NSE stated. The date for the final delisting will soon be announced by the Exchange. First Aluminium Nigeria was listed on the NSE in 1992.
The board of directors of First Aluminium Nigeria said the aluminium company opted to delist its shares from the NSE because of inactivity on the shares of the company and inability of the current listing to help in realising the corporate objectives of the company.
However, the NSE had sanctioned the company twice in 2018 and 2019. First Aluminium was fined N476.280 each in 2018 for unauthorised publication of notice of annual general meeting (AGM) and in 2019 for non-dispatch of the notice of AGM and annual reports to shareholders 21 days before the date of the meeting.
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, rationalisation 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.
Following a resolution by the board of directors of the company on August 08, 2018, shareholders of First Aluminium Nigeria had at the annual general meeting on September 25, 2018 approved the voluntary delisting of the entire issued share capital of 2.11 billion ordinary shares of 50 kobo each.