Ardova shareholders’ fight stalls delisting plans – SEC, NGX step in

By AYOOLA OLAOLUWA

 
The planned delisting of energy giant, Ardova Plc, from the Nigerian Exchange Limited (NGX) has stalled over shareholders’ disagreement on the valuation of the shares held by its owners.

The downstream oil and gas company, it would be recalled, had on Tuesday, February 8th, 2023, announced that it had concluded plans to delist the firm from the NGX as a public liability company.

According to the company, its parent company, which own 74% equity in the Nigerian oil and gas firm, Ignite Investments and Commodities Limited,  had gotten the boards approval to buy off the remaining 26% equity held by minority shareholders.

“The proposed transaction is subject to the review and clearance of the Securities and Exchange Commission as well as the approval of the shareholders of the company.

“The terms and conditions of the proposed transaction will be provided in the scheme document, which will be dispatched to all shareholders following the receipt of an order from the Federal High Court to convene a Court Ordered Meeting.

“If the conditions of the proposed transaction are satisfied and same is sanctioned by the Federal High Court, the company would be delisted from NGX. Further developments will be communicated to shareholders in due course.

“Ardova Shareholders and members of the public are advised to exercise caution in dealing in Ardova’s shares until further information is provided”, part of the statement by the company had explained.

Sources in the firm revealed that representatives of Ignite Investments and Commodities Limited had last year December  approached the Board of Directors of Ardova Plc, intimating it of its readiness to acquire the shares held by other shareholders of the company.

One of the sources  privy to the board’s meeting informed BH that Ignite Investments and Commodities Limited lawyers had proposed to buy the remaining 26% shares at the rate N17.38 per share.

The lawyers, he continued, informed the board of the wish of the majority owner to delist the company from the NGX after the completion of the takeover process.

However, why representatives of the minority shareholders on the board were not opposed to idea of surrendering their shares, they balked at the offer price of N17.38 per share suggested by Ignite Investments and Commodities Ltd lawyers.

“The minority shareholders insisted on being paid the sum of N66 per share, the same price the new owners had paid billionaire businessman, Femi Otedola, when he sold Forte Oil to them in July 2019 before they can sign off on the transaction.

Owing to their numerical voting strength on the board, representatives of Ignite Investments and Commodities Limited were able to overcome the objections raised by representatives of  minority shareholders on the board to approve  the deal.

The deal, however, cannot be legally completed without the required regulatory approval of both the Nigerian Securities Commission and the Nigerian Exchange Limited.

Angered by the board’s decision to deny them the ‘real’ value of their investments by paying them peanuts, the aggrieved minority shareholders vowed to fight on until they get justice.

One of the avenues the aggrieved shareholders are exploring is by petitioning the SEC and NGX to intervene in the matter.

In a letter both addressed to the Nigerian Securities Commission (SEC) and NGX seen by our correspondent, the investors kicked against the proposed delisting of Ardova Plc, alleging that market rules were not complied with.

While calling on the regulatory bodies to pay more attention to investor’s interests, the shareholders argued that investors always suffer huge losses anytime a corporation is  delisted.

Some of the demands include: That SEC and NGX should activate  section 131 of the Investment and Securities Act and rule 445 of the commission, which requires Ignite Investment and Commodities Limited to make a Mandatory Tender Offer to all minority shareholders for their shareholdings; and that Ignite Investment and Commodities Limited should be compelled to pay the minority investors the fair value of at least N66.00, for their stocks in Ardova Plc, and not the N17.38 they were being offered.

The aggrieved shareholders maintained that the equality of shares guaranteed by CAMA could only be ensured if the above provisions are adhered to.

Reacting to the allegations, the management of Ardova described the petitioners as being overtly greedy.

According to a statement released by the firm, while reacting to the charges leveled against it, the offer price of N17.38 represents a premium of 22.44% and 24.38% to the 30-day and 60-day volume weighted average share price of NB14.19 and N13.97, respectively, on 30 November 2022 (being the last trading day before the Offer).

BH check shows that Ardova closed its last trading day (Friday, February 17, 2023) at N16.90 per share on the Nigerian Stock Exchange, representing 0.48 kobo value depreciation in what Ignite Investment and Commodities is offering to buy from shareholders.

Meanwhile, the petition by the aggrieved shareholders had stalled the planned delisting by Ignite Investments and  Commodities Limited.

According to a source in a regulatory agency with oversight functions over the company, the delisting cannot go ahead as planned until inspectors look into the merits of the minority shareholders’ petition.

While reacting to the standoff, the President,  New Dimension Shareholders Association, Mr. Patrick Ajudua, disclosed that shareholders are worried about the high rate of delisting on the NGX.

“We have seen the delisting Of Mobil, the proposed delisting of Oando and now Ardova. The delisting is akin to a father seeing his children dying during his lifetime, whereas, it ought to be the children burying their father.

“The regulators should look at this development from that point of view because if the companies are no more who are they going to regulate, it becomes a question.

“For us as shareholders, we are investing in these companies for future returns on our investments, but what we are seeing is an act of shortage in our investment plan via delisting”, Ajudua lamented.

The shareholders’ union leader advised regulatory agencies to meet with all business owners in order to ascertain the obstacles on the part of their businesses.

“Some of those factors that are still under the purview of regulators, such as the high cost of filing their returns, which has become extremely high and also the increase in VAT tax on share purchase and sales should be discontinued because before it was not there but it was brought back via Finance Act.