Shareholders of Paints and Coatings Manufacturers Nigeria (PCMN) Plc are scheduled to meet tomorrow to vote on sub-joined resolutions that will see the relapse of the company to a private limited liability company and the delisting of its shares from the Nigerian Stock Exchange (NSE).
A Federal High Court had directed the company to convene a court-ordered meeting on February 15, 2018 in Lagos during which shareholders will deliberate and vote on the scheme of arrangement for the change in the status of the company and the delisting from the NSE. A new company-Paintcom Investment Nigeria Limited is proposed to emerge after the delisting.
Authorities at the NSE have confirmed that the company had submitted application for scheme of arrangement between the company and holders of its fully paid up ordinary shares in furtherance of the delisting.
The Asset Management Corporation of Nigeria (AMCON) recently sold the fourth largest equity stake in PCMN to Bizfeat Ventures Limited, a relatively unknown firm. AMCON, the bad-debt resolution corporation floated by the government, transferred its 7.4 per cent equity stake in PCMN to Bizfeat Ventures through a negotiated cross deal at the NSE.
The block divestment involved transfer of a total of 58.66 million ordinary shares of 50 kobo each held by AMCON to Bizfeat Ventures at a negotiated price of N1.05 per share.
The move by PCMN comes as leading soft drink company-Seven-Up Bottling Company, concludes the process to return to a privately owned company and delist it shares from the NSE. Avon Crowncaps had earlier delisted its shares.
The NSE had delisted five companies in 2017 with four of them delisted under compulsory delisting due to infractions and poor corporate governance. The four companies delisted in 2017 included Beco Petroleum Products, MTECH Communications, Mass Telecommunication Innovation (MTI) and UTC. Ashaka Cement, which merged with its parent company, Lafarge Africa, was delisted under voluntary delisting option.
In December 2016, the Exchange had delisted six companies including Lennards (Nigeria) Plc, P.S Mandrides & Company Plc, Premier Breweries Plc, Costain (W.A) Plc, Navitus Energy Plc and Nigerian Ropes under compulsory delisting window. It had earlier in May 2016 compulsorily delisted eight companies including IPWA Plc, G. Cappa Plc, West African Glass Industries Plc (WAGI), Investment & Allied Insurance Plc, ALUMACO Plc, Jos International Breweries Plc, Adswitch Plc and Rokanna Plc.
The NSE operates two delisting windows-voluntary and compulsory delisting. Under voluntary delisting, quoted companies can opt to delist their shares from the Exchange due to various reasons including mergers and acquisitions, restructuring and private interests subject to fulfilment of the delisting rules and requirements.
Under the compulsory delisting window, the NSE may opt to delist companies that have failed repeatedly to meet extant rules and best practices in line with the Exchange’s commitment to protect investors and ensure that listed companies comply with global best practices.
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