BY NKIRUKA NNOROM

Chairman, Poly Products Plc, Mr. Michael Bruce, said the company plans to delist its shares from the Nigerian Stock Exchange, NSE.

Making the disclosure at the 45th Annual General Meeting, AGM, with shareholders, in Lagos, Bruce explained that the board and management team decided to toe that path following the high cost of retaining listed equity status at the NSE, adding that application would be made to the NSE and Securities and Exchange Commission, SEC, to that effect on securing shareholders approval.

He also listed other hiccups that warranted the plan to include lingering economic depression in the country as well as excessive cost of printing and distributing annual reports and accounts to its over 11,000 shareholders.

He said, “Various factors, including the general slowdown in the economy, high cost of doing business, statutory requirements of listed companies, cost of administering the register, cost of convening AGMs and Annual Reports & Accounts printing and postage pose difficulties for the company.

“There are 11,000 shareholders, 10,246 of whom hold less than 10 per cent of the total equity. The administrative cost of managing such list is very high and it constitutes a significant drain on the resources of the company.

“Between 2003 and 2008, the company faced severe problems that could easily have led to liquidation. Although this situation was averted, operational cost remain high.”

He assured that the company would work with the existing rules in determining the exit price that will be fair to the parties involved.

He said, “We have not set the exit price, but there are certain guidelines we must follow. The price must not be less than the value of the shares on the floor of the NSE in the last three months. The Nigerian Stock Exchange will be working with us in this regard to ensure that every stakeholder is fairly treated.”

While also giving the approval to the management to consummate the transactions, Mr. Timothy Adesiyan, a shareholder, said that the delisting plan was not surprising, as the shares have been dormant in the last three years.

He urged the management to ensure that it take the number of years the company has been transacting its business with investors’ money into consideration before working out an exit package for them.

Also speaking, Sir Sunny Nwosu, National Coordinator, Independent Shareholders Association of Nigeria, encouraged the company to consider exit package of N5.00, according to general demand by shareholders.

The company recorded 7.2 per cent decline in turnover to N2.24 billion from N2.41 billion in 2010. Profit after tax fell by 16.5 per cent from N60.7 million in 2010 to N50.7 million.

The chairman attributed the decline in turnover to the closure of one of its plant at Ilupeju, saying that the closure became necessary following the old age of the extrusion machine which had become unserviceable.

Shareholders at the meeting approved bonus issue of new share for every 24 previously held by shareholders of the company.