The parent company of Afprint Nigeria Plc, Kewalram, is planning to pay-off Nigerian shareholders in the company and get the company de-listed from the Nigerian Stock Exchange (NSE).
The NSE had last week placed the shares of Afprint Nigeria on technical suspension following the company’s notification of a proposed material transaction that would have implication on the future of its equity capital structure.
THISDAY checks last Monday showed that the foreign majority owners of the company want the company to be 100 per cent owned by them.
“In order to take 100 per cent ownership of the company, the majority shareholders are planning to buy the holdings of Nigerian shareholders and later ask the NSE to de-list the company from being traded in the stock market. Details of the deal are still being worked out,” a market source said.
The shares of the company were placed on technical suspension at N0.86 per share, meaning that investors who want to sell will do so at that price until the process is finalised.
Although the price the parent company will offer Nigerian shareholders is still yet to be known, it was gathered that it will be above the market price.
Afprint Nigeria is following the delistment method adopted by CFAO Nigeria Plc in 2007 when it quit the NSE due to its dwindling fortunes that resulted from the difficult operating environment.
Afprint, which was a major textile manufacturing firm, has been experiencing some qualms in its operations over the years following the challenges of coping with influx of imported textile materials and other unfavourable conditions.
As part of its survival strategies, the company diversified into edible oils production. Consequently, the NSE re-classified the company from the textile sub-sector to agriculture/allied products sub-sector last year.
However, the company is still in woods. For instance, it posted a loss of N128 million for the half year ended December 31, 2008.
Directors of the company had explained that its edible oil mill was out of operations for about four months in the first half of its financial year. The company said that it was experiencing non-availability of food grade hexane in Nigeria, which hampered its operations.
A stockbroker said that the decision of Afprint to de-list is not unexpected considering the fact that shareholders of the company have not received dividend for many years. The last time shareholders received a dividend was 1999.
“I believe the parent company wants to get the company out of the NSE and make it a private company that will attract little attention from the public. Besides, it will no longer be under pressure to submit its results to regulators apart from other stringent requirements listed companies are required to adhere to,” a stockbroker said.
Only recently Cappa & D’Alberto Plc, a construction firm opted to be de-listed from the NSE. Another construction firm - Impresit Bakolori had also voluntarily left the NSE some years back.