Majority shareholders of Afprint Nigeria Plc, Kewalram has resolved to pay N1.50 per share of 50 kobo to the Nigerian shareholders following the decision to de-list from the Nigerian Stock Exchange (NSE).
This translate 74.4 per cent premium over the current market price of the company’s shares on the NSE.
Following the decision to de-list the company due to the unfavourable operating environment, the shares were placed on technical suspension at N0.86 per share last year.
THISDAY broke the news of the delisting plans, which was later confirmed by the Deputy Managing Director of Afprint, Mr. Victor Eburajolo. He explained that it was actually the shareholders that suggested the delisting since the company was neither paying dividend, nor giving bonus issue.
“It was the shareholders themselves that had at one time suggested to us to de-list our shares on the NSE since we have not been paying dividend or bonus for the past five years and yet we keep paying the statutory fee to the Exchange. When we carefully look at the issue and found that what they said was true, the board had to take the decision to de-list," he said.
However, Eburajolo did not disclose the amount Kewalram would pay to the shareholders per share, but only assured that the shareholders would be well treated.
But THISDAY checks revealed that the foreign shareholders have settled for N1.50 per share, giving the shareholders a premium of 74.4 per cent on the current market price of N0.86.
If the shareholders approve the proposal, they will surrender their shares to Kewalram and the Afprint will be de-listed from the NSE.
The company will be subsequently be re-registered as a private company under the relevant provisions of Companies and Allied Matters Act (CAMA) of 1990 and become a wholly own subsidiary of Kewalram Chanrai Group.
Afprint Nigeria was incorporated in Nigeria in 1964 in order to carry on the activities of textile manufacturing among others. It commenced operations in 1966, became a public company and listed on the NSE in 1979.
It performed relatively well from 1979 to 1999. In his letter to shareholders concerning the de-listing, obtained by THISDAY, the Chairman of Afprint, Mr. N.G. Chanrai, explained that from 1999 to date, the company has witnessed continuous downturn in performance as a result of unfavourable market conditions despite several attempts by its management and directors at improving its performance.
He noted that although some initiatives were adopted by the management and directors to turnaround the fortunes, again, government policies frustrated those initiatives.
“The directors are of the opinion that the prevailing conditions will linger and believe that the performance of the company is unlikely to improve in the foreseeable future. The company is further projecting operating losses of N218 million in 2010, N248 million in 2011 and N276 million in 2012,” he said.