ASHAKA CEMENT PLC SEEKS VOLUNTARY DELISTING.

Ashaka Cement PLC may after December 19 formally apply to be voluntarily delisted from the Nigerian stock exchange.

According to a notice and accompanying explanatory notes by the company, voluntary delisting has become inevitable because more than 80% of the company's issued capital is now block owned by LA Farge Africa PLC.

The journey to voluntary delisting, the notice said, started on October 2014 when La  Farge Africa PLC successfully acquired 58.6% of Ashaka Cement's issued capital.

Because this made Ashaka Cement automatically a subsidiary of La Farge Africa, it triggered legally mandatory tender offer (MTO) to then existing minority shareholders.

This was done in December 2014 and subsequently, La  Farge Africa acquired more holdings increasing its shareholding to 82.46%.

However, because this offer was made while insecurity in the North east was near its peak, many shareholders could not take advantage of the MTO.

Eventually, says La Farge Africa, a voluntary tender offer was subsequently made and from this the company acquired more shares to bring its holding to 84.97%.

This means that right now only about 15.03% of Ashaka Cement shares were held by minority shareholders and technically, this was the proportion trade able on the stock exchange.

By implication Ashaka Cement was already short of the minimum 20% of issued share capital demanded by NSE quotation rules.

Thus, voluntary delisting is being set in motion to avoid being sanctioned by the NSE. Besides, it will also save Ashaka Cement PLC the mandatory cost of quotation.

Hence, an extraordinary meeting of shareholders has been fixed for December 19 to vote on the delisting motion and since it requires only 75% of shareholding to approve it, La Farge Africa should easily have its way.

To make it easier on existing minority shareholders, the company is offering to convert 202 Ashaka Cement shares into 57 units of La  Farge Africa shares plus N2 per share to all existing shareholders who opt to exchange their Ashaka Cement holdings.

Of course, existing shareholders who want to, can hold on to their holdings if they so prefer but from the day delisting is approved by the stock exchange, none of those shares can be traded again.

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