The Nigerian Stock Exchange at the weekend delisted Great Nigeria Insurance (GNI) Plc share capital, ending more than 13 years of public quotation and listing on the main board of the equities market.
The delisting was sequel to the request for voluntary delisting by the board of GNI, which opted to revert to a private unquoted company. GNI was listed on the NSE in October 2005.
The Nigerian Stock Exchange had approved application for voluntary delisting by GNI, after the insurance company insisted on delisting its shares from the Exchange. GNI had been struggling to meet the stringent corporate governance practices at the stock market. The insurance company subsequently sought approval to delist its shares.
As part of the delisting process, Insurance Resourcery and Consultancy Services Limited (IRCSL), which owns majority equity stake in the company, had offered to pay cash consideration of 50 kobo per share for every share surrendered by minority shareholders. The exit price of 50 kobo was based on the highest price of 50, which GNI had traded in the last six months.
The board of the company, however, assured that shareholders that intend to continue to be a member of an unlisted GNI shall be free to remain and they have no obligation to receive the exit consideration.
In an explanatory statement on the proposed delisting, the board of the company noted that the voluntary delisting would shield it from any enforcement action that may arise as a result of the outstanding free float deficiency at the NSE.
The board also noted that over the last five years, there has been little or no trading activity on the shares held by the minority shareholders, pointing out that shareholders were not benefiting from the continued listing as they were not getting any exit opportunity and their investments had been locked up and they found it difficult to dispose of their shareholding.
The board added that the company has neither benefitted from the continuing listing as its shares continue to trade at a significant discount to the intrinsic value.
It also said the delisting will afford the company opportunity to further an imminent corporate restructuring exercise to take advantage of emerging opportunities, noting that the company may consider re-listing on the Exchange in the future if the market conditions are favourable.
According to the company, the voluntary delisting would not occasion loss of business opportunities as there are similar unlisted insurance companies that are commanding significant share of the insurance market.