Union Bank and AG Leventis had until 30th June 2017 and 31st July 2017 respectively, to fulfil the regulatory free float requirement of the Nigerian Stock Exchange (NSE).
Having failed at this task, the companies have applied to the Nigerian Stock Exchange (NSE) seeking for an extension of the due date set by the NSE to comply with regulatory free float requirement
Companies listed on the NSE are required to maintain a minimum free float for the set standards under which they are listed in order to ensure that there is an orderly and liquid market for their securities.
The free float requirement for companies on the ASEM Board is 15 percent of market capitalization, Main Board is 20 percent of market capitalization while companies on the Premium Board is 20 percent of market capitalization or above N40 billion on the date The Exchange receives the Issuer’s application to list.
Union Bank and AG Leventis are both listed on the main board of the NSE. They have a free float of 11.64 percent and 14.94 percent, representing a deficiency of 5.06 and 8.36 respectively.
Other companies yet to seek extension following the elapses of their compliance due date includes Capital Hotel with a free float of 2.62 percent as against 20 percent required. The NSE says Capital Hotel is under regulatory watch list.
Caverton offshore support group, a support and logistics company listed on the main board, has a free float of 17.40 percent with a compliance due date of 31 October 2017 which has since elapsed.
Also in violation of the NSE’s free float requirement is Champions Breweries Plc. The company has a free float of 17.30 percent but has obtained approval from the Quotations Committee of the NSE (QCN) and is currently restructuring, with a likelihood of joining the ASeM board after the exercise, where the free float required is 15 percent.
Ekocorp and E-transact are also in violation, with a free float of 11.84 percent and 10.06 percent respectively, with compliance due date long elapsed at 31st October 2017.
Taking steps towards ratifying its free float deficiency, the NSE said, Great Nigerian Insurance Plc with a 16 percent free float against the required 20 percent, “has concluded the first leg of the transaction and Management has engaged the Company on the next stage.”
Infinity trust mortgage’s free float is at a low of 3.50 percent but has until 31st May 2018 to rectify while the Tourist Company of Nigeria with a 3.58 percent free float has begun its delisting process.
Interlinked technology is equally affected with a 14.50 percent free float, while Transcorp is plagued with 6 percent free float to wrestle with, till it attains the requirement of 20 percent if it wants to remain listed on the mainboard of the NSE.
Meanwhile, the Quotations Committee of the NSE’s Management says it has considered and approved an extended timeframe for the companies to regain compliance with the listing requirement.
“The companies are however required to also provide quarterly disclosure reports to The Exchange detailing their level of implementation of the compliance plans.”