Yesterday February 19th 2019, the Nigerian Stock Exchange (NSE), issued a bulletin informing all concerned dealing members that the Management and Board of Newrest ASL Nigeria Plc have decided to voluntarily delist from the Exchange.
While this announcement is not much of a surprise (seeing as speculation about the possible delisting had long been rife), it still is an unfortunate situation; at least for the NSE.
This is because Newrest’s plan to delist is coming at the time when efforts are being made by the NSE to embrace more companies into its fold.
Recall that the NSE’s Chief Executive Officer, Mr Oscar Onyema, had earlier this year outlined the listing of more companies on the Exchange as part of his core agendas this year.
This agenda could be somewhat undermined if already listed companies keep making plans to exit the market.
Back to Newrest ASL’s exit plans…
According to the notice which was issued by the Nigerian Stock Exchange, the company’s stockbroker, Helix Securities Limited, had submitted an application seeking to voluntarily delist Newrest’s entire 634,000,000 ordinary shares.
And there is a reason for this – the company has been unable to meet up with the NSE’s 20% free float requirement.
“Dealing Members are hereby notified that Newrest ASL Nigeria Plc (Newrest or the Company) has through its Stockbroker, Helix Securities Limited, submitted an application to The Nigerian Stock Exchange (The Exchange) for voluntary delisting of the entire 634,000,000 ordinary shares of the Company from the
Daily Official List of The Exchange as a result of its inability to meet up with the 20% free float requirement
of The Exchange.”
What does this mean for the company’s ordinary shareholders?
Precedence from other delisted companies shows that minority shareholders are typically offered a buy out option. This would not be any different for Newrest ASL’s ordinary shareholders.
Already, the company’s stockbroker said it has “opened and deposited sufficient funds to settle minority shareholders in an Escrow Account with Zenith Bank Plc to be managed by Meristem Registrars Limited”.
Perhaps, all is well that ends well after all.
About the company
Newrest ASL Nigeria Plc is a Nigerian company which provides catering and hospitality services to foreign Airlines operating in the country.
The company was incorporated in 1996 and listed on the NSE in 2007. Its market capitalisation stands at N4,089,300,000.00, even as the stock is currently trading at N6.45 on the NSE.
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