By Peter OBIORA investadvocate

Jan 19 2011 15.01 GMT

Lagos (INVESTADVOCATE)-There are indications that the planned delisting of Nigerian Bottling Company Plc (NBC) from the Nigerian Stock Exchange (NSE) is for the Company to make a N45 billion strategic investment within the next three years and seek recapitalisation.

 

Adeleke Adebayo, the General Secretary Independent Shareholders Association of Nigeria (ISAN) confirmed this exclusively Wednesday January 19 2011 to investadvocate in Lagos Nigeria.

 

This is coming on the heels of the meeting held today between the entire Board and Management of the Company and Nigerian Shareholders.

 

“We just meet with the entire Board of Nigerian Bottling Company and had a meeting with them” he said.

 

Adebayo affirmed that NBC had informed them the reason they want to delist from the Nigeria’s Exchange is for the company to take advantage of the emerging business opportunities in Nigeria and do a N45 billion investment within the next three years and recapitalise.

 

The ISAN General Secretary said NBC told them at the meeting that the Nigerian Shareholders cannot wait for a period of between 10 to 15 years when the company may likely resume the payment of dividend; therefore opt to delist and buy off minority shareholders.

 

He affirmed that Nigerian Bottling Company would plunge back whatever profit they realised from their strategic investments in the period in view to the operations of the company; until between 10 to 15 years when they are likely to payout dividend to shareholders of the company.

 

“We at the Independent Shareholders Association has clearly told the Management and Board of the Company that we are against delisting and would not allow them to buyout any minority shareholder not with their proposed N43.00 which does not make sense” he said.

 

Adebayo said that NBC has been in business in Nigeria for about 60 years and it is only the Nigerian minority shareholders that have stood by them and made the company grow to this level.

 

“Whatever value attributable to the shares of Nigerian Bottling Company, were created by minority shareholders. The technical partners hold their shares in bloc and do not trade them” he affirmed.

 

“Why invest in a place that will take them a long time before they get results” Adebayo said.

 

According to him, they will explore all options include going to the Court to seek redress on the perceived injustice the Nigerian Bottling Company want to met out to them. “We built the franchise in Nigeria and cannot be treated this way” he said.

 

Priot to this time, investadvocate in an interview Tuesday January 19 2011 with Sir Sunny Nwosu, the National Chairman, Independent Shareholders Association, had said that Shareholders in the Nigerian Capital Market (NCM) may ask Nigerians to boycott the products of Nigerian Bottling Company over its planned delisting from Nigeria’s Exchange if they fail to see reasons in the ongoing dialogue with the company to change its decision and remain in Nigeria.

 

Sir Nwosu said Nigerians grew the Company to become an institution either through buying shares and trading same. “The technical partners do not trade their shares, they just leave them hanging” he said.

 

“What they are trying to do is not the best way to thank us for what we have done. And if they try to show smartness, we will counter it. South Africa has been with them, they didn’t bring money. It was the Nigerian Shareholders that brought in money into the company to grow it” the Shareholder Leader said.

 

“My only concern is that our Regulators are not coordinated; the government itself sometimes is not coordinated; because of inconsistencies in policies and this is a lesson to them. If we succeed in stopping the makers of Coca Cola to remain in the Capital Market, the Government too should move fast to correct infrastructural decay in Nigeria; so as to support the manufacturers to come in and enjoy a very good environment” he affirmed.

 

According to him, if NBC succeeds in delisting, a lot of the Multinationals would also want to poll out; thereby collapsing the Capital Market.

 

In the same vein, investadvocate in a telephone chat Wednesday January 19 2011 with Emmanuel Ikazoboh, Interim Administrator of the NSE, affirmed that the Exchange has not come to conclusion in its discussion with NBC over its planned delisting.

 

“We are yet to conclude with them on the issue, they are meeting with Shareholders today; but we have told them that it is not the right thing to delist from the NSE” he said.

 

Ikazoboh further said that it will not be good for the Nation’s Stock Exchange if Nigerian Bottling Company delist; because other multinationals listed on it will also follow in their footstep; which may collapse the Nigerian Capital Market (NCM).

 

On Tuesday December 14 2010, NBC issued a notice through the NSE informing the public that it is planning to delist from the Nigeria’s Exchange in order to emerge a wholly owned subsidiary of its majority shareholder, Coca-Cola Hellenic Bottling Company of South Africa through a proposed scheme of arrangement.

 

The notice reads thus: “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.

 

NBC further affirmed 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.

 

The makers of Coca Cola in Nigeria said 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.