By JEROME USHAKANG
The Board of Ashaka Cement (AshakaCem) has approved the reconstruction of shares held by its shareholders in Lafarge Africa Plc.
Under the agreement, shareholders of AshakaCem will exchange 202 units of shares held for every 57 Lafarge Africa shares. The approval was given at the Extraordinary General Meeting (EGM) held in Abuja a fortnight ago.
Following this development, AshakaCem is now a fully-owned subsidiary of Lafarge Africa and offers its shareholders the window to liquidate their investments following the delisting of the Gombe State -based cement company from the trading floor of the Nigeria Stock Exchange (NSE) last July.
Speaking on the issue, the Chief Financial Officer (CFO),of Lafarge Africa, Bruno Bayet, said: “The minority shareholders of Ashaka now have the opportunity to be part of Lafarge Africa with total installed production capacity of over 14 million metric tonnes per annum and strong growth prospects.”
According to Bayet, Lafarge Africa reported a four-fold increase in operating margins for the nine-month period ended September 30, 2017 as net sales increased by 39 percent to close at N223.7billion.
Also speaking at the EGM held in Abuja, Chief Executive Officer (CEO) of Lafarge Africa, Michel Puchercos, said: “We remain committed to Ashaka in good times and in bad times because we have a long-term view of our investments. Ashaka cement as a brand has for decades become synonymous with housing and infrastructural solutions in the entire north. We shall maintain that legacy of quality even in the face of temporary setbacks.”
He stressed that though now, a 100 percent subsidiary of Lafarge Africa, Ashaka cement will have its own board of directors and addition, the sale of cement products under the AshakaCem brand will continue in the north.
Ashaka Cement Plc voluntarily delisted from the NSE for violation of the exchange free float deficiency provision of 20 per cent, in a statement posted on the NSE website by the company’s directors.
Lafarge Africa Plc currently holds 84.97 per cent of Ashaka Cement, bringing the free float that was tradable on the NSE to 15.03 per cent.
This is against the 20 per cent stipulated by the Exchange.
As a result, the company opted for voluntary delisting to avoid NSE enforcement action of regulatory delisting because the free float deficiency was not likely to be remedied.
It then decided to operate as an unlisted entity, with only 0.20 per cent of the shares held by the minority shareholders being traded. “Neither the company nor any shareholders were benefiting from the continued listing as shareholders are not getting any exit opportunity. “And their investments have been locked up while they find it difficult to dispose of their shareholding.
However through the voluntary delisting of AshakaCem, they are exercising a regulatory provision that will shield the company from any enforcement action that the NSE may effect. They are also providing an exit consideration to minority shareholders, who do not wish to remain in an unlisted company.’’
The shareholders of Ashaka Cement, who have exercised their option to exit the company prior to the delisting, would receive 57 Lafarge Africa shares for 202 Ashaka shares. They will also receive a N2 per share cash consideration