By Goddy Egene
Dangote Cement Plc has applied to the Nigerian Stock Exchange (NSE) for 24-month extension of the waiver its secured two years to maintain a free-float that is lower than 25 per cent and still remained listed on the Nigerian bourse.
THISDAY had last week reported that Dangote Cement and Union Bank of Nigeria Plc were violating the listing requirements of the exchange by not maintaining the 25 per cent free-float required by the exchange.
Dangote Industries Limited controls 94 per cent of Dangote Cement’s paid-up share capital, while only six per cent is held by the public. Similarly, Union Bank has less 25 per cent equity in the hands of investing public while Asset Management Corporation of Nigeria (AMCON) and the core investors-Union Global Partners Limited (UGPL) control the balance.
Some analysts had blamed the development on the inability of the regulators to enforce their post-listing requirements.
However, the NSE explained to THISDAY that the waiver given to Dangote Cement two years ago, will elapse on October 26, 2012, disclosing that the company had officially applied for an extension of the waiver.
According to the exchange, in granting the merger between Dangote Cement and Benue Cement Company Plc in 2010, the council of the exchange had pointed out the significant potential breach of the free-float requirement the merger would pose.
“The council of the exchange favourably considered the request of Dangote Cement for a 24-month period of extension within which to comply with the minimum free-float requirement, that is, by October 26, 2012.
“During this period, the company was expected to commence plans to undertake a dual listing on an international exchange. Dangote Cement Plc has however intimated that, the October 2012 deadline might not be feasible given the enormous requirement for a dual listing and has therefore requested for additional 24 months to comply,” NSE said.
Speaking on Union Bank, the exchange said the non-compliance of the free-float requirement resulted from the Central Bank of Nigeria (CBN) intervention, which led to the coming in of AMCON and UPGL into the bank.
“The NSE has written to Union Bank to forward to the exchange a detailed plan on how they intend to meet the minimum free float requirement,” NSE said.