In the past few months, there has been spate of announcements by some companies to delist from Nigeria’s stock exchange (Nigerian Exchange Limited or NGX). The move to exit the system has continued to generate wide concerns among Nigerians, sparking discussions about the motivations behind such decisions, their various implications and potential impact on the capital market.
In a recent report by Legit.ng, seven notable companies that were once stalwarts of the exchange market has voluntarily made known their plans to removed their shares, thus becoming private entities.
Union Bank-In a disclosure through her corporate filing on the Nigeria Exchange Limited (NGX website) declared its decision to delist from the NGX, following the completion of the acquisition of the majority shareholding by Titan Trust Bank Limited. Union Bank has been on the Nigeria stock market for 52 years.
GlaxoSmithKline (GSK)- Few months ago, the giant pharmaceutical firm announced its plans to leave Nigeria, with a new arrangement to maintain her presence through a third-party company. The British pharmaceutical company has been in Nigeria for more than half a century, having opened its first office in 1971. It has equally concluded plans to withdraw from the stock exchange, citing economic challenges as the primary reason for its departure.
Oando Plc- Subject to the approval of the ongoing initiatives to acquire 42.63% minority shares from Ocean and Oil Development Partners Limited (OODP), the Board of the oil firm has indicated its intention to delist her shares from the NGX. With the delisting, the company will have to embark on re-registration as a private entity.
PZ Cussons Nigeria Limited (PZ)- This multinational Nigerian company has also announced her intent to exit the capital market. Meanwhile her parent company, PZ Cussons (Holdings) Limited has proposed a buyout of the minority shareholders at a price of ₦21 per share, using a scheme of arrangement.
Ardova Plc-In line with the approved Scheme of Arrangement between Ardova and the holders of its fully paid up ordinary shares, the energy company is delisting from the stock market (NGX). The arrangement is said to have also received the endorsement of the Security and Exchange Commission (SEC) and sanctioned by the court. Ardova, an off-shoot of the defunct African Petroleum is ending about 53-year journey on the Nigeria stock Exchange.
Capital Hotels Plc-In a detailed statement made available to The Exchange, the company announced the delisting of its shares, saying that the decision is motivated by plans to pursue strategic opportunities. The firm further highlighted that the move will facilitate strategic planning for enhanced performance, cost reduction, and increased competitiveness within its industry.
Coronation Insurance Plc-Following an acquisition proposal from Coronation Capital (Mauritius) Limited, the Nigeria company has also indicated her plans to withdraw from The Exchange. The potential deal will still be subject to all regulatory approval by the relevant authorities.
These delisting companies has cited various reasons behind their actions, ranging from the harsh economic and financial difficulties, especially the present lingering foreign exchange FX crisis, regulatory constraints, dwindling market as result of the low purchasing power of the customers, high cost of production and other myriad of challenges.
Economic experts and various industry stakeholders have been consistent in their call for all efforts to be made by the government to tackle those militating factors, in order to make Nigeria’s stock exchange attractive and competitive.