THE Board of MRS Oil Nigeria Plc has offered to pay N46.29 billion as exit consideration to shareholders following voluntary delisting from the Nigerian stock market.
The company disclosed this in an updated statement to the Nigerian Exchange Limited (NGX) and the investing public on Thursday, May 16.
It proposed to delist 342,884,706 ordinary shares at an exit consideration of N135 per share to shareholders.
“The board of directors of the company, having undergone a strategic reassessment of the company’s status, particularly considering regulatory obligations, administrative and compliance costs, emerging opportunities, evolving market conditions and the trajectory of projected long-term financial and operational growth, proposes to de-list the issued shares of the company, comprising a total of 342,884,706 ordinary shares from the daily official list and trading on the main board of the NGX,” the company stated.
MRS Oil noted that the NGX’s rules for delisting equity securities from its daily official list required the company to make adequate provisions to purchase the interest of dissenting shareholders.
It said, “In accordance with the requirements of the NGX, the share price at which the interest of such shareholders shall be bought, shall not be less than the highest price at which the shares of MRS Oil traded over the last six months immediately preceding the date on which the notice of the EGM was issued, being N135 per share.”
The ICIR reported that MRS Oil had scheduled an extraordinary general meeting (EGM) for May 21 to request shareholders’ approval for its voluntary delisting from the Nigerian stock market.
After the EGM, dissenting shareholders may elect to receive the exit consideration between June 25 and July 1, 2024, the company said.
It hinted that it would set aside sufficient funds in a custody/escrow account to be domiciled with a registrar or custodian from which the exit consideration shall be paid to relevant dissenting shareholders.
Besides other steps to be followed, the voluntary delisting would only become effective upon shareholders’ consideration and approval of the board’s resolution, it added.
“The exit consideration shall be settled by way of electronic bank transfers to the respective bank accounts provided by dissenting shareholders in the election form.”
The ICIR reports that MRS Oil operates in the Nigerian downstream oil and gas sector and started operating in the country in 1913 under the name Texaco.
In 2023, NGX recorded the delisting of companies worth over N264.92 billion as seven companies delisted their stocks and about six others wanted to delist.
The companies included Union Bank of Nigeria, Courteville Business Solution, Capital Hotels, Ardova, Global Spectrum Energy, Sterling Bank, and Consolidated Hallmark Insurance. However, the last two companies were relisted as holding companies.
The national chairman of the Progressive Shareholders Association of Nigeria (PSAN), Boniface Okezie, told The ICIR that the delisting of companies from the Nigerian stock market had been a call for concern.
He suggested a law be enacted to stop voluntary delisting while attracting more companies to list on the exchange.
He had also raised concern about the Securities and Exchange Commission withholding of investors’ payoffs (exit consideration) from delisted companies of which the Olam International Limited payoff to acquire Dangote Flour Mills Plc had dragged for many years.