MTN Nigeria's public shares sale, held in December 2021, remains the only IPO to be recorded by the NGX in the past five years. has seen a surge of voluntary exits from companies listed on the bourse as more firms, for various motivations, rejig their business models to seek greater opportunities outside public ownership.
MTN Nigeria's public shares sale, held in December 2021, remains the only IPO to be recorded by the NGX in the past five years. It is so because the exuberance that once drove equity trading in the days before the 2008 global financial crisis continues to elude the market, making IPOs unviable for corporates.
Ardova , Union Bank, Capital Hotels and Courteville have left the stock exchange, just like GlaxoSmithKline Consumer , which last year shut down its manufacturing operations in Nigeria and switched to a distribution model. Public listing sometimes comes with bottlenecks and stock exchange rules, such as time limits for filing financial reports and other statutory documents, which could attract weighty fines if flouted. It can be challenging for companies to observe.
"It is not uncommon for companies to leverage stock exchanges to raise capital, expand their business, and later decide to go private or delist," Andrew Latham, managing director of"Being publicly listed offers access to a broad capital pool but also comes with regulatory scrutiny, pressure to meet quarterly expectations, and other challenges. Once these companies have capitalised on the benefits, some see an advantage in returning to private status," he added.
The full acquisition led the company to delist its shares from the NGX in July 2023, enabling him to own it privately. Total assets as of September 2022, when 22 Hospitality procured the controlling stake, was N28.9 billion, which climbed to N30.3 billion about the time it full acquired the company.Courteville completed its exit from the NGX last November after a few months in the works. The firm quit as the directors' board felt the market value of its shares was not commensurate with its key performance metrics, even though the management thought the fundamentals were strong and attractive enough.
Revenue also dropped by 24 per cent to N1 billion, while total assets dipped to N4.4 billion from N4.6 billion.Drug maker GSK announced last August it was winding down its Nigerian operations. The company disclosed"its strategic intent to cease commercialisation of its prescription medicines and vaccines in Nigeria through the GSK local operating companies and transition to a third-party direct distribution model for its pharmaceutical products.