Kayode Tokede
Despite the need to expand business frontier with ease of access to capital through the capital market, a total of 11 companies worth N515.15billiion in market capitalisation delisted from the Nigerian Exchange Limited (NGX) in 2023.
However, a total of N150.91billion worth of new listings were listed on the Exchange in the year under review.
Capital market analysts expressed disappointment with management of these companies’ decision to delist, blaming some for failing to comply with the post-listing requirement of bourse.
As gathered by THISDAY, the likes of Consolidated Hallmark Insurance Plc with about N11.82billion in market capitalisation, Union Bank of Nigeria Plc worth N193.65billion and Ardova valued at N21.82billion in market capitalisation delisted from the Exchange in 2023.
Union Bank of Nigeria’s delisting after 52 years on the NGX unfolded following Titan Trust Bank’s (TTB) acquisition.
TTB, securing an 89.4 per cent stake in 2021, swiftly increased ownership to 93.4 per cent by 2022, signalling a drive toward complete control. In May 2023, TTB’s bid for all remaining Union Bank shares at N7.00 per share each finalized total ownership.
Union Bank initially set the payout for minority shareholders at N7 per share but later increased it to N7.70 per share.
In November, one of the oldest bank in Nigeria announced that it was at the final phase of the delisting process.
Capital Hotels Plc, N9.55billion, and Global Spectrum Energy Services Plc, N400 million, Rak Unity Petroleum worth N16.99million also delisted from the Exchange.
The first Nigerian indigenous company to be listed on the NGX concluded its liquidation process in November 2023.
Acting as the Liquidator, Mrs. Chinwe Chiwete in a notice to the Exchange notified market community of the company’s conclusion to voluntary winding up it operations.
Before embarking on the liquidation process, RAK Unity Petroleum Company had initiated a strategic five-year business plan in January 2016.
However, before liquidating, the company sold its physical assets to Asharami Synergy Limited.
The legacy governance challenges triggered the proposed delisting of Oando Plc’s N146.07biillion worth in market capitalisation.
Elsewhere, companies like PZ Cussons worth N91.32billion, GSK N19.91billion, and Coronation Insurance, N19.19blliion announced their intension to exit the capital market on a combination of liquidity issues and macroeconomic challenges such as difficulty accessing foreign exchange.
Commenting, the Vice President, Highcap Securities, Mr. David Adnori said: “The stock exchange requires companies trading their stocks on its platform to regularly file their financial statements to enable shareholders and the investing public to have information that would enable them to make investment decisions.
“When companies fail to submit their books for scrutiny, the exchange uses its big hammer, which usually comes in a form of sanction and when it becomes consistent, the firms are shown the way out. Others opted to delist from the Exchange based on their management decision and the market is a free entry and free exit.”
In the year under, VFD Group Plc added N46.53billiion to market capitalisation, followed by Chapel Hill Denham Management Limited that listed N92.53billion and MeCure Industries Plc that listed N11.84billion in market cap on the Exchange in 2023.
Despite the notable withdrawal of big-name companies from the NGX, the bourse rose to a new milestone, with the All-share Index (ASI) rising to an all-time high of 74,000 basis points in 2023.
The chief executive officer, NGX, Mr Temi Popoola, who is now NGX Group CEO-designate had noted that the Exchange had a renewed focus on listings for the year 2023, stressing that, “We will be using listings as a vehicle for meeting strategic aspirations as the new dispensation comes in through increased advocacy and engagements.”
