NSE suspends trading in shares of CFAO

Proshare

December 08, 2006

 

 

<DIV class=timestamp>The Nigerian Stock Exchange on Thursday suspended trading in the shares of CFAO Nigeria Plc following the receipt of an application for voluntary delistment by the NSE. With the development, the shares of the company can no longer be traded in the market. </DIV>
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<P>The suspension was announced to the stockbrokers during Thursday trading. CFAO, which is owned 65 per cent by CFAO France and 35 per cent by Nigerians, was quoted on the NSE on August 28, 1971 in the conglomerate sub-sector. It opted for delistment due to difficult operating environment. </P>

 

<P>The shareholders of the company approved the delistment since September. The company now plans to operate as a private company. It is into distribution of general goods, building materials, fabrication of steel water tanks, distribution and servicing of motor vehicles, forklift trucks, industrial and agricultural equipment, installation, repairs and servicing of lifts, manufacturing and sale of ballpoint pens, supply, installation, repair and maintenance of fuel dispensers, pump and fire fighting equipment; and manufacture and sale of malt beverages.</P>

 

<P>However, after many years of positive financial performance, the company posted cumulative losses of N2.308bn in 2004 and 2005 as a result of stiff competitive environment facing all its operating divisions.</P>

 

<P>The Chairman, CFAO, Chief Molade Okoya-Thomas, had earlier in a letter to the shareholders explaining the development, said that due to negative performance, the Board of Directors accepted the proposal by the majority shareholders, CFAO France, to acquire the shares held by Nigerian shareholders. </P>

 

<P>The foreign shareholders have agreed to pay N3.75 for every 50 kobo per share, which currently traded at N2.79 at the stock market before the suspension. This translates to a premium of 34.4 per cent or N0.96 for shareholders, a deal some market operators hailed.</P>
<P>Okoya-Thomas had explained that the conditions that led to the losses in 2004 and 2005 might not improve in the nearest future.</P>

 

<P>“Since the beginning of the current financial year, the competitive forces have not diminished and trading conditions have continued to be difficult. Besides, the company’s operating results have remained depressed and borrowings are at an unacceptable high level. In fact, the company has projected operating loss of N393m and no dividend for the year ending December 31, 2006,” he had said. </P>

 

<P>After the delistment, CFAO Nigeria will become a wholly-owned subsidiary of CFAO France and will sub-sequently be re registered as a private company under the relevant provisions of the Nigerian laws.<EM><SPAN style=\"COLOR: #a9a9a9\">- punch</SPAN></EM></P></PUNCH_TEXT></DIV>

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