By Yakubu LAAH investadvocate

Dec 14 2010 16.20 GMT

Lagos (INVESTADVOCATE)-Nigerian Bottling Company Plc (NBC) is planning to emerge a wholly owned subsidiary of its majority shareholder, Coca-Cola Hellenic Bottling Company of South Africa through a proposed scheme of arrangement.

 

NBC gave this notice to the Nigerian Stock Exchange (NSE) Tuesday December 14 2010 in Lagos Nigeria.

 

The proposed Scheme of Arrangement will be between NBC and its members; which will involve a cancellation of part of its Share Capital, such that the Company would emerge a wholly owned subsidiary of Coca-Cola Hellenic of South Africa.

 

“The Nigerian Bottling Company Plc (“NBC” or “the Company”), wishes to formally inform the Nigerian Stock Exchange (“NSE”) of a proposed Scheme of Arrangement (“Scheme”) between the Company and its members, involving a cancellation of part of its share capital, such that the Company would become a wholly owned subsidiary of its majority shareholder, Coca-Cola Hellenic Bottling Company S.A. (“Hellenic”)” the notice said.

 

According to the bottlers of Coca-Cola in Nigeria, the proposed Scheme would be effected under the provision of S539 of the Companies and Allied Matters Act (“CAMA”), which allows for an arrangement to be proposed between a Company and its members.

 

NBC further affirmed that the proposed structure envisages a cash consideration to be paid as compensation to shareholders for the cancellation of the shares of the Company which Hellenic (through its subsidiaries) does not already own.

 

The Company in the notice said that the terms and conditions thereof will be incorporated in a Scheme document to be circulated within the stipulated statutory period to all the Company’s shareholders for their consideration.

 

The proposed Scheme includes a cash payment of N43.00 per NBC share as consideration to the minority shareholders. The proposed price would provide all minority shareholders with a premium of 37.4 percent (37.4%) to the 30-day average closing price and 43.2% to the closing price of NBC shares on the NSE on December 13 2010 which was N30.03 per NBC share.

 

NBC said the proposed Scheme will also be subject to the approval of the shareholders at a meeting of the Company, convened on the order of the Federal High Court (“FHC”), and will only become binding and effective upon obtaining the approval of not less than three-quarters in value of shares held by those present and voting, in person or by proxy, at the said meeting and the subsequent sanction of the FHC.

“An application will consequently be made for the delisting of the Company’s shares from the Daily Official List of the NSE. The Company will also be re-registered as a Private Company in accordance with the relevant provisions of CAMA” the NBC notice said.

In his reaction to the development, Shareholder Leader, Boniface Okezie, National Chairman, Progressive Shareholders Association of Nigeria (PSAN) said the action of NBC was as a result of the fallout of what is going on in the Nigeria Capital Market (NCM).

He further affirmed that a lot of companies would follow in the footstep of Nigerian Bottling Company and delist from the Nigeria’s Exchange.

According to him, what is happening in this environment is not happening where the parent companies of some of these Multinational Companies operates from. “This is because the Nigerian Stock Exchange is a private organisation and all the companies listed therein are private organisations as well and not owned by the Government” he said.  

Okezie said that the Government appointed Regulators in the Nigerian Market are creating the impression they can do whatever they like; just like what is happening in the Nigerian Banking Industry. “This Multinationals are afraid that tomorrow maybe their turn that Government can nationalise their company; so the most important thing is for most of them to find a way to get out of Nigeria and go to neighbouring countries like Ghana to operate” the Shareholder Leader affirmed.

According to him, NBC may not want to retain more shareholders because of the regulatory environment they find themselves. “Take for instance WAMCO Nigeria Plc, their shares is a hot cake if you can see it to buy; yet they are not listed on the Exchange; but are doing fine’ their shares is almost N300.00 per share and they pay a high dividend. They are operating to pay tax to the Government.

Okezie also affirmed that the Regulators would be the losers if most of these Multinational Companies delist; because they would no longer collect their listing or other fees depending on the transaction. “Today, these fees would elude them if companies continue to delist; because they have not taken any step to remedy the issues that are affecting the Capital Market” he affirmed.