By Nkiruka Nnorom
THE shares of BUA Cement Plc rose again by 6.64 percent on Friday, a day after its listing on the Nigerian Stock Exchange (NSE) following buy interest from investors. The stock, which was listed at N35 per share, rose to N41 after investors bought 8.198 million units valued at N336.14 million in 161 deals.
The share price had risen maximally by 9.9 percent after the listing on Thursday to N38.45 per share, bringing its cumulative gains for the two trading days to 17.1 percent.
The listing of the company, which has effectively become the third largest capitalised entity on the stock market, followed the merger of Cement Company of Northern Nigeria (CCNN), previously a listed company and Obu Cement Limited, which resulted in the listing of a bigger entity – Bua Cement Plc.
Consequently, the entire 13.14 billion ordinary shares of CCNN were delisted from the Daily Official List of the Nigerian Stock Exchange, while the entire 33.86 billion ordinary shares of 50 kobo each of BUA Cement Plc were listed. Mr. Yusuf Binji, Managing Director, BUA Cement, had assured at the listing that shareholders of the enlarged company would benefit from the expected increase in profitability and dividend.
“The merger will increase the production capacity of the enlarged company to 8.0 million metric tonnes per annum (mtpa). It is anticipated that in addition to meeting the demand from customers in our core regions in the country, the enlarged company would be positioned to distribute its products in new geographical markets, creating the potential for additional shareholder value creation.
“The merger will provide a platform where the enlarged company benefits from economies of scale in procurement, distribution and manufacturing of the products offered to our customers. We expect the benefits accruing from greater economies of scale to accrue to many stakeholders,” he said.
He explained that the merger would provide opportunities for significant cost savings and improved operational efficiencies by streamlining operations and optimising the use of combined resources.