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By Chinwendu Obienyi
Fresh facts have emerged on how 21 companies may face the regulatory hammer of the Nigerian Exchange Limited (NGX), after failing its compliance standard plan regarding free float of shares to the investing public.
According to data obtained from the X-Compliance report of the exchange, the free float value of the 21 companies has risen to N35.05 billion. The companies with free float deficiencies include; Abbey Mortgage Bank, Aluminium Extrusion Industries Plc, Austin Laz and Company Plc, Capital Hotels Plc, Champion Breweries Plc, CWG Plc, EkoCorp Plc, eTranzact International Plc, Geregu Power Plc, Golden Guinea Breweries Plc, Infinity Trust Mortgage Bank Plc and International Breweries Plc.
Others include; Medview Airline Plc, Prestige Assurance Plc, The Tourist Company of Nigeria Plc, Transcorp Hotels Plc, NPF Microfinance Bank Plc, Union Dicon Salt Plc, Union Bank of Nigeria (UBN) and UPDC Plc.
Companies listed on NGX 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 requirements for companies listed on the various Boards of NGX include; For Growth Board, a minimum of 10 per cent of the issued and fully paid up shares or the value of its free float is equal to or above N50 million, for entry segment; For Growth Board, a minimum of 15 per cent of the issued and fully paid up shares or the value of its free float is equal to or above N50 million, for standard segment; For ASeM, a minimum of 15 per cent of issued and fully paid up shares or the value of its free float is equal to or above N50 million; For Main Board, a minimum of 20 per cent of the issued and fully paid up shares or the value of its free float is equal to or above N20 billion; For Premium Board, a minimum of 20 per cent of issued and fully paid up shares or the value of its free float is equal to or above N40 billion.
Findings revealed that the aforementioned companies have free float deficiencies, have applied for waivers from the managements of NGX Regulation companies (RegCo) and NGX, and have provided compliance plans with tentative timelines to support their requests.
Daily Sun investigations revealed that the managements of NGX RegCo and NGX considered and approved an extended timeframe for the companies to return to compliance with their listings requirements.
The companies are also required to provide compliance reports on a quarterly basis to NGX RegCo detailing their level of implementation of the compliance plans provided.
Further findings revealed that the NGX RegCo is engaging companies tagged with N/A. This is why the companies do not have compliance dates yet. However, Geregu Power Plc is compliant with the minimum free float requirement after having a free float value above N20 billion.
However, in line with the practice of monitoring a company’s free float, the company’s free float value will be monitored for a period of three months from Friday, 3 February 2023 to Friday, 5 May 2023.
