Great Nigeria Insurance to Delist Shares over Free Float Deficiency

By Goddy Egene

The board of directors of Great Nigeria Insurance (GNI) Plc has opted to delist the shares of the company from the Nigerian Stock Exchange (NSE).

According to the board, the voluntary delisting was as a result of inability to meet the 20 per cent free float requirement of the NSE.

Explaining the factors that informed the decision, GNI said over the last five years, there had been little or no trading activity on the shares held by the minority shareholders.

“There has also been a considerable fall in trading volumes over the last 12 months with an average daily volume of 1, 200 units during the period March 2017 to March 2018.

“Shareholders are not benefiting from the continued listing as shareholders are not getting any exit opportunity and their investments have been locked up and they find it difficult to dispose of their shareholding.

“Neither the company has benefitted as the company’s shares continue to trade at a significant discount to the intrinsic value,” the company added.

Also, GNI’s free float currently stands at 16.03 per cent, significantly below the NSE’s minimum free float of 20 per cent. With this Free Float deficiency, the NSE could take enforcement action even though

The Quotations Committee of the  National Council of The Exchange has extended the curing period to May 2020. We do not expect that this deficiency will be cured during that period and we expect the NSE to initiate a regulatory delisting,” it said.

GNI noted that through the voluntary delisting, the directors would be exercising a regulatory provision that will shield the company from any enforcement action that the exchange may effect, which may arise as a result of the outstanding free float deficiency.

“Furthermore, through the voluntary delisting process, the company will be providing an exit consideration to minority shareholders who do not wish to remain in an unlisted company,” it added.

 GNI added that the delisting will afford the company to carry an imminent corporate restructuring exercise to take advantage of emerging opportunities and may consider re-listing the company in the future if the market conditions are favourable.

“The voluntary delisting will not occasion loss of business opportunities as there are similar unlisted insurance companies who are commanding significant share of the insurance market. Also, minority shareholders will not lose their shares because of the voluntary delisting and such shareholders may retain their membership in the unlisted company,” it said.