AshakaCem seeks to delist shares from Stock Exchange

Gombe state-based Ashaka Cement (AshakaCem) Plc has initiated the process to delist its shares from the Nigerian Stock Exchange (NSE), after business consolidation and additional shares purchase saw Lafarge Africa emerging with about 85 per cent majority equity stake in the company.

With about 85 per cent equity stake locked in majority bloc equity holding, the remaining retail shares of 15.03 per cent fall below the minimum requirement of 20 per cent free float stipulated by the rules of the NSE for stocks on its main board.

The board of directors of AshakaCem has passed a resolution to propose voluntary delisting to shareholders of the company at an extraordinary general meeting (EGM) scheduled to hold on Monday December 19, 2016.

According to the board, through the voluntary delisting, the company will be shielded from any enforcement action that the Exchange may effect, for example by way of a regulatory delisting in light of the outstanding free float deficiency.

Also, through the voluntary delisting process, the company will be providing an opportunity to minority shareholders – who do not wish to be members of an unlisted company – to exit the company and therefore be shielded from being members of an unlisted company.

Upon conclusion of the EGM, shareholders of AshakaCem may exit the company prior to the delisting by either trading their shares on the Floor of the NSE through their nominated stockbroker or accept exit terms of 202 shares of AshakaCem for 57 shares of Lafarge Africa in addition to a cash consideration of N2 for every AshakaCem share.

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In line with regulation, shareholders will have 90 days period after the EGM to exercise these options. The shares exchange terms were similar to those of previous Mandatory Tender Offer (MTO) and the Voluntary Tender Offer (VTO) undertaken by Lafarge Africa to acquire additional shares in AshakaCem.

According to the company, under the proposed delisting and settlement of consideration, minority shareholders in AshakaCem will be offered benefits, including revenue diversification by geography as a result of Lafarge Africa’s operations in Nigeria, South Africa and Ghana. This is in addition to revenue diversification by plant location due to wide spread operations across the North East, South East and South West regions of Nigeria.

AshakaCem was incorporated in Nigeria on August 7, 1974 as a private limited liability company, which was converted to a public company on September 7, 1974 and commenced operations in September 1979.

The company has a cement plant in Ashaka Works, Gombe State, in the North-Eastern region of Nigeria with an installed capacity of c.1mt. Plans are underway to add an additional 3mt of capacity over the next three years.

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