The Nigerian Stock Exchange (NSE) on Tuesday, advised dealing members of the delisting of Newrest ASL Nigeria Plc, a leading provider of catering and hospitality services to international airlines and airports in Nigeria.
According to the report signed by Head of Listings Regulation, Godstime Iwenekhai, Newrest has submitted an application for voluntary delisting of the entire 634,000,000 ordinary shares of the company from the Daily Official List of the Exchange through Helix Securities limited, its Stockbroker.
Newrest would be delisting on the grounds of its inability to meet up with the 20 percent free float requirement of the Exchange.
Free Float means the number of shares of an Issuer outstanding and available to be traded. In other words, it is the number of shares held by the investing public as opposed to those held in lock-up by Parent, Subsidiaries, Directors, and Insiders of the company.
The rules of the NSE governing compliance with free float requirements requires that every Issuer maintains a minimum free float level which ‘’shall at all times be held in the hands of the public, in accordance with the Listing Standards under which the shares were admitted on the Daily Official List of The Exchange,’’
The provision for free floats varies as NSE requires companies listed on the Main Board to maintain a 20 percent minimum free float of their market capitalisation.
On the other hand, companies in the Alternative Securities Market (ASeM) have a 15 percent free float benchmark.
For companies on the Premium Board, the rules require a minimum free float requirement of 20 percent of its issued share capital, or the value of its free float shares is equal to or above N40 billion on the date the Exchange receives its application to list.
The provision however outlined grounds for granting a waiver on the minimum free float requirements.
Penalties for erring listed companies range from publishing issuer’s name on The Exchange’s periodic “X-Compliance Report” as operating “Below Listing Standard” to commencing the process of delisting such issuer.
As at December 31 of 2018, Newrest Group (22.98%), Rical Enterprises Ltd (9.99%0, Rifkind Ltd (17.18%), Roswello Limited (17.18%) and Harrowditch limited (14.31%) held 81.64 percent shares of Newcrest ASL Nigeria.
Shareholders of the company on January 29, earlier in the New Year authorized the voluntary delisting at the Extraordinary General Meeting (EGM) of the company in Lagos.
To that end, Newcrest according to the report filed on the Exchange has set up and deposited sufficient funds to settle minority shareholders in an Escrow Account with Zenith Bank Plc and assigned Meristem Registrars Ltd to manage the fund.
The amount in the fund was not given, however, a likely estimate could amount to N751 million based on the remainder 18.36 percent- not held by the aforementioned major stakeholders-measured as a percentage of the market capitalisation (N4.1 billion) as of Tuesday.
The process of setting up the account is in line with provisions of section 1.10 of the Rules for Delisting of Equity Securities from the Daily Official List of The Exchange which requires that such accounts be set up to purchase the interest of all shareholders opposed to the voluntary delisting.
Newcrest Consolidated and Separate Financial Statements for the Year ended 31 December 2018 show an improvement in top line and bottom line as revenue grew 38 percent to N5.43 billion in 2018.
Despite a 43 percent surge in Cost of Sales to N1.88 billion, Newcrest improved its gross profit to N3.56 billion, an increase of 36 percent from the figures for the full year 2017.
Profit Before Tax increased significantly some 285 percent from N392 million in 2017 to improve Profit After Tax by 285 percent compared to N387 million in 2017, despite the increase in tax of over 300 percent in 2018.
Newcrest proposed a final dividend of 20 kobo per 50 kobo ordinary share, subject to appropriate withholding tax and approval.
SEGUN ADAMS
