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Ashaka Cement to Delist From NSE

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Ashaka Cement Factory
  • Ashaka Cement to Delist From NSE

The Directors of AshakaCem Plc have passed a resolution to propose to its shareholders, a voluntary delisting of the company from the floor of the Nigerian Stock Exchange (NSE), where shares, bonds or securities are bought and sold.

Delisting means the removal of the listed stock from the exchange, when a company can no longer meet the requirements for listing.

At a meeting on November 16th, the board agreed that the resolution will be presented to shareholders of AshakaCem for consideration at an Extraordinary General Meeting (EGM) slated for Monday (today) December 21, 2016.

Stating reasons for the delisting, the firm explained that at the conclusion of the Mandatory Tender Offer (MTO), based on approvals, it offered to purchase some or all of shareholders’ shares for a price in 2015, its free float, the proportion of shares traded in the stock market, fell to 17.54 per cent.

This further reduced the minimum acceptable condition to 15.03 per cent at the conclusion of the Voluntary Tender Offer (VTO), in September 2016.

Public float is the amount of shares a company can trade on the Exchange, which is regulated at 20 per cent. But if the public quote is less than 20 per cent, the firm is expected to make adjustments to beef up the figure or its shares would delisted from the Exchange.

“Hence, AshakaCem has been unable to meet the NSE Rule requirement for every publicly listed entity to have a ‘Free Float’ (tradable shares) of not less than 20 per cent on the Exchange.

“Through the Voluntary Delisting of AshakaCem, the Directors of the Company will be shielding the Company from any enforcement action that the Exchange may effect, for example by way of a Regulatory Delisting in light of the outstanding free float deficiency.

“Furthermore, through the voluntary delisting process, the company will be providing an opportunity to minority shareholders who do not wish to be members of an unlisted company to exit the company and therefore be shielded from being members of an unlisted company.”

Upon conclusion of the EGM, the company added that shareholders of AshakaCem may exit the firm prior to the delisting by either trading their shares on the floor of the exchange through their nominated stockbroker or accept exit terms.

The terms were as offered for the MTO and the VTO – 202 shares of AshakaCem for 57 shares of Lafarge Africa, a cement and allied products manufacturer, plus a cash consideration of N2.00 per every AshakaCem share, while shareholders will have 90 days period post the EGM to exercise these options.

According to the company, under the proposed delisting and settlement of consideration, minority shareholders in AshakaCem will be offered benefits, including revenue diversification by geography as a result of Lafarge Africa’s operations in Nigeria, South Africa and Ghana.

This is in addition to revenue diversification by plant location due to wide spread operations across the North East, South East and South West regions of Nigeria.

Reacting to the development, the President, Renaissance Shareholders Association, Olufemi Timothy, described the decision as a “welcome development”, urging AshakaCem investors to exchange their shares for Lafarge Africa. “It is normal since the public float of AshakaCem is less than 20 per cent. The company must delist accordingly but the right of existing shareholders subsists.

“My advice is that the remaining minority shareholders in Ashaka Cement should exchange their shares for Lafarge Africa and enjoy the benefits. Five shares of Lafarge to 202 shares of Ashaka plus N2 cash per share. They should take advantage.”

The National Coordinator, Progressive shareholders Association, Boniface Okezie, said it is not new for a company to delist from the exchange if they do not have the required percentage to still remain in the market.

“We the shareholders already know that Ashaka will do that after the tender offer carried out last year approved by the shareholders. Lafargeholcim already have majority shareholding in Ashaka, so any other per cent left is insignificant for it to remain listed.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Crude Oil

Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

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Oil

Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

Oil retreated from an earlier rally with investment banks and traders predicting the market can go significantly higher in the months to come.

Futures in New York pared much of an earlier increase to $63 a barrel as the dollar climbed and equities slipped. Bank of America said prices could reach $70 at some point this year, while Socar Trading SA sees global benchmark Brent hitting $80 a barrel before the end of the year as the glut of inventories built up during the Covid-19 pandemic is drained by the summer.

The loss of oil output after the big freeze in the U.S. should help the market firm as much of the world emerges from lockdowns, according to Trafigura Group. Inventory data due later Tuesday from the American Petroleum Institute and more from the Energy Department on Wednesday will shed more light on how the Texas freeze disrupted U.S. oil supply last week.

Oil has surged this year after Saudi Arabia pledged to unilaterally cut 1 million barrels a day in February and March, with Goldman Sachs Group Inc. predicting the rally will accelerate as demand outpaces global supply. Russia and Riyadh, however, will next week once again head into an OPEC+ meeting with differing opinions about adding more crude to the market.

“The freeze in the U.S. has proved supportive as production was cut,” said Hans van Cleef, senior energy economist at ABN Amro. “We still expect that Russia will push for a significant rise in production,” which could soon weigh on prices, he said.

PRICES

  • West Texas Intermediate for April fell 27 cents to $61.43 a barrel at 9:20 a.m. New York time
  • Brent for April settlement fell 8 cents to $65.16

Brent’s prompt timespread firmed in a bullish backwardation structure to the widest in more than a year. The gap rose above $1 a barrel on Tuesday before easing to 87 cents. That compares with 25 cents at the start of the month.

JPMorgan Chase & Co. and oil trader Vitol Group shot down talk of a new oil supercycle, though they said a lack of supply response will keep prices for crude prices firm in the short term.

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Crude Oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

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Crude oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

Oil prices rose on Monday as the slow return of U.S. crude output cut by frigid conditions served as a reminder of the tight supply situation, just as demand recovers from the depths of the COVID-19 pandemic.

Brent crude was up $1.38, or 2.2%, at $64.29 per barrel. West Texas Intermediate gained $1.38, or 2.33%, to trade at $60.62 per barrel.

Abnormally cold weather in Texas and the Plains states forced the shutdown of up to 4 million barrels per day (bpd) of crude production along with 21 billion cubic feet of natural gas output, analysts estimated.

Shale oil producers in the region could take at least two weeks to restart the more than 2 million barrels per day (bpd) of crude output affected, sources said, as frozen pipes and power supply interruptions slow their recovery.

“With three-quarters of fracking crews standing down, the likelihood of a fast resumption is low,” ANZ Research said in a note.

For the first time since November, U.S. drilling companies cut the number of oil rigs operating due to the cold and snow enveloping Texas, New Mexico and other energy-producing centres.

OPEC+ oil producers are set to meet on March 4, with sources saying the group is likely to ease curbs on supply after April given a recovery in prices, although any increase in output will likely be modest given lingering uncertainty over the pandemic.

“Saudi Arabia is eager to pursue yet higher prices in order to cover its social break-even expenses at around $80 a barrel while Russia is strongly focused on unwinding current cuts and getting back to normal production,” said SEB chief commodity analyst Bjarne Schieldrop.

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Crude Oil

Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

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oil

Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

Oil prices rose to $65.47 per barrel on Thursday as crude oil production dropped in the US due to frigid Texas weather.

The unusual weather has left millions in the dark and forced oil producers to shut down production. According to reports, at least the winter blast has claimed 24 lives.

Brent crude oil gained $2 to $65.47 on Thursday morning before pulling back to $64.62 per barrel around 11:00 am Nigerian time.

U.S. West Texas Intermediate (WTI) crude rose 2.3 percent to settle at $61.74 per barrel.

“This has just sent us to the next level,” said Bob Yawger, director of energy futures at Mizuho in New York. “Crude oil WTI will probably max out somewhere pretty close to $65.65, refinery utilization rate will probably slide to somewhere around 76%,” Yawger said.

However, the report that Saudi Arabia plans to increase production in the coming months weighed on crude oil as it can be seen in the chart below.

Prince Abdulaziz bin Salman, Saudi Arabian Energy Minister, warned that it was too early to declare victory against the COVID-19 virus and that oil producers must remain “extremely cautious”.

“We are in a much better place than we were a year ago, but I must warn, once again, against complacency. The uncertainty is very high, and we have to be extremely cautious,” he told an energy industry event.

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