CFAO Delists From The Stock Exchange
August 30th, 2006 mishacko || mishacko@yahoo.co.uk
By Mishack Okpara
A company listed under the Conglomerates sub-sector of The Nigerian Stock Exchange, CFAO Nigeria Plc, has decided to delist from the stock exchange due to cumulative losses it has posted in the last three years. However, it will still operate as a private company in Nigeria.
The company which was listed 35 years ago is owned 65 per cent by CFAO France and 35 per cent by Nigerians. It is into distribution of general goods, building materials; fabrication of steel water tanks; distribution and servicing of motor vehicles, forklift trucks, industrial and agricultural equipment; and installation, repairs and servicing of lifts. It is also involved in manufacturing and sales of ballpoint pens; supply, installation, repair and maintenance of fuel dispensers, pump and fire fighting equipment; and manufacture and sales of malt beverages.
However, after many years of positive financial performance, the company posted cumulative losses of N2.308bn in 2004 and 2005 as a result of competitive environment in all its operating divisions. Consequently, the majority shareholders, CFAO of France decided to acquire the shares held by the Nigerian shareholders and operate as a private company in Nigeria.
The foreign shareholders, according to sources, have proposed to pay N3.75 per share for every 50 kobo share, which currently trades at N2.79 at the stock market. This translates to a premium of 34.4 per cent or N0.96 for shareholders that would accept the proposal instead of divesting at the market price of N2.79. The company has convened a court-ordered meeting for September 19, 2006 in Lagos where the shareholders will approve the proposal.
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