AshakaCem plans NSE exit to avoid ‘unnecessary cost’

The directors of Ashaka Cement Plc have announced the company’s delisting from the Nigeria Stock Exchange (NSE).

The decision makers of the company listed various reasons for the voluntary exit, naming the violation of the Free Float Deficiency provision of the NSE by the company as primary.

The directors explained that Lafarge Africa Plc holds 84.97 per cent of Ashaka Cement; leaving the free float tradable on the NSE as 15.03 percent as opposed to 20 percent stipulated by the exchange.

Given the violation, the exchange might initiate a regulatory delisting given that the free float deficiency is not likely to be corrected hence the need to operate as an unlisted company, the directors explained.

The company also said that over the last five years there has been little or no trading activity, with only 0.20% shares owned by minority shareholders being traded.

“Neither the company nor any shareholders are 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,” the directors said.

“Moreover, the company is bearing unnecessary cost in complying with its listing obligations.”

The voluntary delisting is in accordance with a regulatory provision that shields the company from any enforcement action the NSE may prescribe.

An exit consideration has also been provided for minority shareholders who do not wish to trade with an unlisted company.

Minority shareholders have the chance to exit before the delisting on NSE or give 202 AshakaCem shares for 57 Lafarge Africa Plc shares.

Also, N2 per share will be paid to shareholders exchanging their AshakaCem shares for Lafarge Africa shares and shareholders wishing to remain with AshakaCem will not be compelled to take the cash consideration.

Shares of AshakaCem traded at N11.07 per share on Wednesday but dropped to N10.77 on Thursday.