NSE Delists Shares of Paints and Coating Manufacturers

The entire issued share capital of Paints and Coatings Manufacturers Nigeria (PCMN) Plc was delisted from the Nigerian Stock Exchange on Friday following the company’s request for voluntary delisting. Before the delisting the NSE had earlier suspended trading on PCMN on May 30, which was the effective date for determining shareholders, who will qualify to receive the scheme shares. A Federal High Court had directed the company to convene a court-ordered meeting on February 15, 2018 in Lagos where shareholders deliberated and voted to approve a scheme of arrangement for the change in the status of the company and the delisting from the NSE. A new company-Paintcom Investment Nigeria Limited is proposed to emerge after the delisting. According to the scheme of arrangement the holders of the scheme shares be allotted the appropriate number of shares of Paintcom Investment Nigeria or be paid a cash consideration of N1.15 per scheme share for the surrender and cancellation of the said scheme shares. Before then, the Asset Management Corporation of Nigeria (AMCON) had sold the fourth largest equity in PCMN to Bizfeat Ventures Limited, a relatively unknown firm. The block divestment involved transfer of 58.66 million ordinary shares of 50 kobo each held by AMCON to Bizfeat Ventures at a negotiated price of N1.05 per share. With the delisting, PCMN will now operate as a private company.The NSE operates two delisting windows-voluntary and compulsory. Under voluntary delisting, quoted companies can opt to delist their shares from the Exchange due to various reasons including mergers and acquisitions, restructuring and private interests subject to fulfilment of the delisting rules and requirements. Under the compulsory delisting window, the NSE may opt to delist companies that have failed repeatedly to meet extant rules and best practices in line with the Exchange’s commitment to protect investors and ensure that listed companies comply with global best practices. Although shareholders had always complained of inadequate protection when companies delist, the Chief Executive Officer of the NSE, Mr. Oscar Onyema had defended the delisting of firms, saying the market is free entry and free exit.He said: “Companies in their life cycle will list and some of them will delist over time. That is the reality that exchanges around the world experience. Companies will delist for different reasons from voluntary to regulatory delisting, mergers and acquisitions and other things that would cause them to delist. We cannot regulatory prevent a company that freely listed on our platform from delisting because it is not a prison. What we can do is to ensure that when they are leaving, there are certain things they must put in place for their shareholders and we believe that our current listing rules, which are bench-marked against other rules in other jurisdictions do provide those protections.”