By Gbenga Agbana

Wednesday, 26 Jan 2011

Some of the 57 firms suspended recently by the Nigerian Stock Exchange over inadequate capital base are making moves to merge their operations to meet the Exchange’s recapitalisation requirement, the Interim Administrator of the NSE, Mr. Emmanuel Ikazoboh, has said.

Ikazoboh, who disclosed this to our correspondent on Tuesday, also said that some of the firms had met the Exchange’s N70m capital base requirement.

Investigation by our correspondent, however, revealed that some of the affected firms were already raising funds to enable them to meet the recapitalisation requirements.

A source who asked not to be named because he was not authorised to speak on the issue, said Afrinvest West Africa Limited had floated a N2bn private placement to enhance its shareholders’ fund.

The source said the private placement was floated because a core investor had shown interest in the company, adding that the management was willing to get more investors to become part owners of the company.

The NSE had last week suspended 57 dealing member firms from the trading floor, over low shareholders’ fund.

Some of the companies affected are: Adamawa Securities Limited, Afrinvest West Africa Limited, Alangrange Securities Limited, BGL Securities Limited, Nigerian Stockbrokers Limited, Cowry Asset Management Limited and UBA Stockbrokers Limited.

Our correspondent, however, gathered that UBA Stockbrokers Limited was no longer trading on the NSE as at the time of the suspension, since it had applied to the NSE to withdraw from trading, pending the take-off of the holding company of UBA, which would take over the stockbroking function of the group.

It was also learnt that some investors had withdrawn their accounts from some of the stockbroking firms suspended last week.

Ikazoboh had on Thursday, assured investors who were clients of the suspended stockbroking firms of safety of their investments.

“The suspended dealing member shall be under a duty to instruct and appoint another dealing member to carry out any instructions already received by it on behalf of its clients prior to suspension and shall immediately notify the Exchange in writing of such appointment,” he had said.

Source: Punch