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Authorities of the Nigerian Stock Exchange (NSE) have approved the delisting of Ashaka Cement Plc from the Exchange, paving the way for the subsidiary of Lafarge Africa to revert to a private limited liability company.

 

The approval by the Quotation Committee of the Exchange capped a long-drawn process that had seen Lafarge Africa staking cash and shares in many tender offers aimed at acquiring minority shares in Ashaka Cement.

 

Lafarge Africa had separately launched a Mandatory Tender Offer (MTO) and Voluntary Tender Offer (VTO) to acquire minority shares in Ashakacem. During the MTO and VTO, Lafarge Africa offered 57 new Lafarge Africa shares for 202 AshakaCem shares and a cash consideration of N2 per every AshakaCem exchanged.

 

Shareholders of AshakaCem had at an extraordinary general meeting (EGM) in December 2016 approved the resolutions for a voluntary delisting of the company from the NSE. With the approval at the EGM, shareholders were given a 90-day window to decide on the exit plan on offer, in line with the requirements of the NSE on voluntary delisting.

Within the 90-day period, shareholders had three options. They may decide to trade their shares on the NSE through their nominated stockbroker. Alternatively, they may decide to receive consideration from Lafarge Africa in exchange for transferring their shares, on same terms as were for the MTO and VTO. On the other hand, shareholders may decide to retain their shareholdings in the unlisted AshakaCem.

 

The board of Ashakacem said the voluntary delisting and full integration of the company as subsidiary of Lafarge Africa will offer minority shareholders many benefits, including revenue diversification by geography as a result of Lafarge Africa’s operations in Nigeria, South Africa and Ghana.

 

They added that shareholders also stand to benefit from revenue diversification by plant location due to wide spread operations across the Northeast, Southeast and Southwest regions of Nigeria.

 

According to the board, through the voluntary delisting, the company, which current free float of 15.03 per cent is in violation of the NSE listing rule of a minimum of 20 per cent, will be shielded from any enforcement action or sanction that the NSE may impose due to the violation.

 

They noted that a mandatory regulatory delisting that would have resulted from unresolved free float deficiency could damage the reputation of the company.

 

Lafarge had on July 9, 2014 received shareholders’ approval to consolidate its cement businesses in Nigeria and combine these with South African operations to create a leading sub-Saharan building materials giant to be known as Lafarge Africa Plc. The consolidation was done by transferring Lafarge’s assets in South Africa and Nigeria to Lafarge Cement Wapco Nigeria Plc.

 

Under the transaction, Lafarge Group transferred its direct and indirect shareholdings in Lafarge South Africa Holding Limited of 72.4 per cent and its equity in three other cement companies in Nigeria-United Cement Company of Nigeria Limited, 35 per cent, Ashaka Cement Plc, 58.61 per cent and Atlas Cement Company Limited, 100 per cent to Lafarge Wapco for a cash consideration of $200 million and the issuance of some 1.4 billion Lafarge Africa shares to the Lafarge Group.

 

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