Some of Nigeria’s privatised state-owned enterprises in which the Federal Government had diluted a significant amount of its equity, may in two months time be listed on the country’s stock market.
The Bureau of Public Enterprises (BPE) plans to make Initial Public Offering (IPO) for Indorama Eleme Petrochemicals Limited, Skyway Aviation Handling Company Limited (SAHCOL, 100 per cent owned by the Sifax Group), and NICON Insurance Limited.
BPE Director, Development institution and National Resources, Joe Anichebe revealed that under the plan, the IPO for the Nigerian Machine Tools (NMT), Osogbo, Osun State, will be done next year.
Addressing why it took so long for the Nigerian Government to list the shares of the privatised state-owned enterprises on the Nigerian Stock Exchange (NSE), Anichebe said it was a risk the BPE could not afford, as many of the state-owned enterprises were not profitable.
“You know that the first rule to listing on the Exchange is that you have to be profitable, and we don’t want to risk the money of poor Nigerians by offering IPOs for those companies when they are not being profitable,” Anichebe explained to newsmen.
What Investors are saying about this development
Equity investors have made unenthusiastic expressions following BPE’s plans to offer the aforementioned state-owned enterprises. Many of the investors who voiced out their opinions, would prefer the BPE deferred the IPOs to enable investors to prepare for the offers for increased and enhanced participation.
Former Secretary-General, Independence Shareholders Association of Nigeria, Adebayo Adeleke, argued that coming at this point in time, the IPOs may already be targeted at strategic investors, and not retail shareholders because the timing would not attract full participation from local investors.
“If BPE wants to float Eleme Petrochemicals at this time, the target market cannot be retail investors that will buy 100-500 units…, they have already shortlisted strategic investors.
“They cannot bring it at a time of the year when we are facing election. Why are they in a hurry to float within a month, it has been there for decades, and they want to sell off at this turbulent era unless you have a backdoor arrangement,” he said.
In a similar vein, the President, Standard Shareholders Association, Godwin Anono, said it is not a good time for investors.
“This is not a good time at all, everybody is struggling to feed; nobody is ready to put money into any offer now. They should postpone it, else no retail investor will subscribe to it.” anono argued.