Stakeholders worried as NGX delists 1.31 billion shares of Ardova

The Nigerian Exchange Limited (NGX) said it has delisted the entire 1,310,629,267 issued share capital of Ardova Petroleum Plc from the daily official list.

This, it said, followed the submission of the required post-approval documents from Ardova Petroleum” and pursuant to the scheme of arrangement between Ardova and the holders of its fully paid ordinary shares of 50 Kobo each as approved by the Securities and Exchange Commission (SEC) and sanctioned by the court.

Ardova, had in February, announced the receipt of an offer from Ignite Investments & Commodities Limited to buy out minority holders of its shares at an offer price of ₦17.38 per share.

Ignite Investment had previously acquired 970,166,694 shares in the then Forte Oil Plc from Zenon Petroleum & Gas Limited, Thames Investment Incorporated and Femi Otedola for N66.25 per share.

This was followed by a further offer to acquire up to 500,000 shares, representing 0.04 per cent of the total issued and fully paid-up capital of Forte Oil Plc from other shareholders of the company, bringing its shareholding to 74.06 per cent.

The offer price of N66.25, at the time represented an upside potential of 330.19 per cent.

Ardova Plc in the notice by its Company Secretary, Oladeinde Nelson-Cole said the offer price represents a premium of 22.44 per cent and 24.38 per cent to the 30-day and 60-day volume weighted average share price of ₦14.19 and ₦13.97 respectively, on 30 November 2022.

Recall that Coronation Insurance had recently stated in a letter to the exchange that it has received an offer from Coronation Capital (Mauritius) Limited to acquire shares of the company at 65 kobo per share and subsequently delist from NGX.

Data from NGX indicated that no less than 44 firms valued at almost N350 billion were delisted from the daily official list in seven years – 2015 to 2022.

Investors, apparently irked by the renewed delisting moves, have urged the government to focus on creating an enabling environment for business operations.

They also urged the regulators to avert the renewed move by companies to delist voluntarily from the exchange by adopting fresh measures to deepen the market, promote more listing and encourage companies to maintain their listing status.

They argued that unless appropriate measures are taken to rev up the ease of doing business in Nigeria, the current harsh operating environment would continue to depress the profit margins of listed firms, impede their growth and subsequently compel them to exit the market.

President of NewDimension shareholders, Patrick Ajudua, said voluntary delisting occurs when companies are not deriving any benefit from listing due to harsh operating conditions which triggers consistent losses and erosion of capital.

Ajudua stressed the need for the government to address the issue of multiple taxation and other challenges that have continued to impact negatively on businesses and listed firms.

“Regulator must revisit the rule of exit price determination in delisting so that it will be in line with the date the market is officially informed. This will ensure equity and fairness in sharing arrangements.

“Also, effort must be made to proactively dialogue with companies in Capital mkt to ensure that all problems relating to exit are promptly addressed to avoid shortchanging the minority shareholders,” he said.