Union Bank Plc, Lafarge Africa Plc and 22 other companies listed on the Nigerian Stock Exchange suffer free float deficiencies.
Free float represents the portion of shares of a corporation that are in the hands of public investors as opposed to locked-in stock held by promoters, company officers, controlling-interest investors, or governments.
The NSE said companies listed were required to maintain a minimum free float for the set standards under which they were listed in order to ensure an orderly and liquid market for their securities.
It said the free float requirement for companies on the ASEM Board was a minimum of 15 per cent of issued and fully-paid up shares while that of the Main Board was a minimum of 20 per cent of the issued and fully-paid up shares.
According to the NSE, companies listed on the premium board are also required to have a free float of a minimum of 20 per cent of issued and the fully-paid up shares or the value of its free float should be equal to or above N40bn on the date the Exchange receives the issuer’s application to list.
Union Bank has a free float deficiency of 10.39 per cent and was given a grace period till May 2020 to comply with the regulatory requirement.
Similarly, Lafarge’s free float deficiency stood at 16.13.
Others are A.G Leventis Plc, Capital Hotel Plc, Caverton Offshore Support Group Plc, Champion Breweries Plc, Ekocorp Plc, eTranzact International Plc, Infinity Trust Mortgage Plc, The Tourist Company of Nigeria Plc and Transcorp Hotels Plc, which had deficiencies of 11.80 per cent, 2.99 per cent, 17.30 per cent, 17.17 per cent, 12.64 per cent, 17.77 per cent, 3.50 per cent, 1.75 per cent and six per cent, respectively.
Portland Paints and Products Nigeria Plc, Global Spectrum Energy Services Plc, CWG Plc, Aluminium Extrusion Plc, Union Dicon Salt Plc, Austin Laz and Company Plc, Notore Chemical Industries and Medview Airline Plc had free float deficiencies of 14.57 per cent, 7.01 per cent, 15.97 per cent, 17.99 per cent, 18 per cent, 19.36 per cent, 10.02 per cent and 14.36 per cent, respectively.
Also, Skyway Aviation Handling Company Plc, Omoluabi Mortgage Bank Plc, Ellah Lakes Plc, Cement Company of Northern Nigeria Plc, Lafarge Africa Plc and Prestige Assurance Plc each recorded deficiencies of 19.39 per cent, 1.96 per cent, 13 .83 per cent, 2.97 per cent, 16.13 per cent and 18.95 per cent, respectively.
The NSE said the companies had applied for waivers from the Regulation Committee of the National Council of The Exchange and had specifically provided compliance plans with tentative timelines to support their requests.
It said the RegCom considered and approved an extended timeframe for the companies to regain compliance with the listing requirement.
The notice read in part, “The companies are, however, required to also provide quarterly disclosure reports to the Exchange detailing their level of implementation of the compliance plans.”
Capital Hotel, Caverton, Champion Breweries Plc and Ekocorp have long passed their compliance due dates, which were in 2017.
Capital Hotel’s compliance due date was March 31 while Caverton, Champion Breweries Plc and Ekocorp’s due date was October 31.
e-Tranzact and SAHCO’s compliance due dates were May 17 and October 2019, while other companies are due for compliance by 2020 and forward.
The NSE said the companies whose compliance due dates had passed requested additional extension, which would be presented to the Council for approval.
It said it was engaging other companies to ensure compliance by their due dates.