The Nigerian Exchange (NGX) has officially delisted the entire issued share capital of Flour Mills of Nigeria Plc from its Daily Official List, a move signaling a significant shift in the company’s operations and market presence. The delisting, effective December 30, 2024, follows months of regulatory preparations and shareholder deliberations.
In a weekly market bulletin, NGX explained the decision, stating: “Following the approval of the company’s application to delist its entire issued share capital from Nigerian Exchange Limited (NGX), please be informed that the entire issued share capital of Flour Mills of Nigeria was, on Monday, December 30, 2024, delisted from the Daily Official List of NGX.”
This announcement comes on the heels of a December 16, 2024 bulletin, where NGX first informed investors of the suspension of trading in Flour Mills shares. The suspension, which preceded the delisting, was described as a preparatory step for the company’s planned exit from the stock exchange.
Majority Shareholder’s Move
At the heart of the delisting lies a strategic decision by Flour Mills’ majority shareholder, Excelsior Shipping Company Limited, to acquire all shares held by minority shareholders. This move consolidates ownership under Excelsior Shipping and paves the way for the company’s transition to a private entity.
In a statement, Flour Mills explained the rationale behind the decision: “The proposal to delist is aimed at consolidating ownership and enabling the company to operate with increased flexibility. This will enhance its ability to make long-term strategic decisions without the constraints of public market regulations.”
The acquisition plan aligns with Section 715 of the Companies and Allied Matters Act (CAMA) 2020, which permits a majority shareholder to acquire outstanding shares held by minority stakeholders, provided regulatory approvals are secured. Flour Mills had earlier obtained a “no objection” ruling from the Securities and Exchange Commission (SEC), fulfilling a critical requirement for the delisting process.
Market Reactions and Implications
The delisting of Flour Mills has stirred mixed reactions among investors and analysts. While some see the move as a pragmatic step for the company to streamline operations, others express concerns about reduced transparency and diminished opportunities for minority shareholders.
“This is a significant development for the Nigerian stock market,” said a Lagos-based financial analyst. “Flour Mills’ exit reflects the growing trend of companies opting for private ownership to focus on long-term goals without the scrutiny and demands of public markets.”
However, concerns about minority shareholder rights have also been raised. “While the law permits such consolidation, it’s crucial to ensure that minority shareholders are fairly compensated,” the analyst added.
Strategic Decisions and Regulatory Landscape
Flour Mills’ decision to delist is not isolated but indicative of broader trends in Nigeria’s corporate and regulatory environment. Experts point to the evolving dynamics of the Nigerian stock market, where companies face increasing pressures to comply with stringent listing requirements and investor expectations.
For Excelsior Shipping Company Limited, the consolidation represents an opportunity to retool Flour Mills’ business strategies without the operational limitations often associated with public companies. Industry watchers suggest that the company could be positioning itself to explore private equity investments or regional expansion plans without external interference.
A Storied Legacy on the NGX
Flour Mills’ departure from NGX marks the end of an era for one of Nigeria’s most prominent companies on the stock exchange. For decades, the company symbolized stability and growth in Nigeria’s agricultural and industrial sectors, with its shares drawing consistent investor interest.
The move also underscores the evolving corporate landscape, where businesses increasingly prioritize operational flexibility over public listing benefits. In recent years, several companies have delisted from the NGX, citing similar motivations of ownership consolidation and strategic realignment.
Future Outlook
As Flour Mills transitions into private ownership, the company faces a new set of opportunities and challenges. Analysts believe that the move could strengthen its ability to compete in a dynamic market environment, particularly as Nigeria grapples with economic uncertainties and shifting policy frameworks.
“The delisting could be a double-edged sword,” said a market observer. “While it gives Flour Mills the freedom to make bold decisions, it also places greater responsibility on its leadership to ensure accountability and deliver results, even without public oversight.”
For the Nigerian Exchange, the delisting raises questions about its ability to retain large-cap companies amid mounting pressures. NGX must continue to innovate and provide incentives to attract and retain listed firms, ensuring the stock market remains vibrant and appealing to both domestic and international investors.
