The Nigerian Stock Exchange (NSE) has approved the delisting of Great Nigeria Insurance Plc (GNI) from the exchange.
According to exchange, the approval followed GNI Plc’s evidence of opening an escrow account in the registrar’s name and sufficient funds to pay shareholders who have accepted to exit.
According to the company, consideration accruing to shareholders of GNI Plc that elect to accept the exit consideration have been computed as at October 24, 2018 and would be settled by way of electronic transfer to the respective bank accounts of shareholders and it’s expected to be completed on or before 31 December 2018.
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.
Also, GNI’s free float currently stands at 16.03 per cent, significantly below the NSE’s minimum free float of 20 per cent. With this Free Float deficiency, the NSE could take enforcement action even though
The Quotations Committee of the National Council of The Exchange has extended the curing period to May 2020. We do not expect that this deficiency will be cured during that period and we expect the NSE to initiate a regulatory delisting,” it said.
GNI had said that through the voluntary delisting, the directors would be exercising a regulatory provision that will shield the company from any enforcement action that the exchange may effect, which may arise as a result of the outstanding free float deficiency.
“Furthermore, through the voluntary delisting process, the company will be providing an exit consideration to minority shareholders who do not wish to remain in an unlisted company,” it added.
GNI added that the delisting will afford the company to carry an imminent corporate restructuring exercise to take advantage of emerging opportunities and may consider re-listing the company in the future if the market conditions are favourable.