Nigeria’s most capitalised company on the stock exchange, Dangote Cement recorded a sale of about 550 million shares at a price of N227.5. The trade was consummated in a one-off deal likely sold to a single strategic investor.
Reports from Reuters suggest the trade was between negotiated in a deal between seller Meristem Stockbrokers Ltd and buyer CSL Stockbrokers Ltd. Dangote Cement’s shares price closed 4% down to N230 at the close of trading Monday.
This trade becomes the third sale since August 2017 in what investors see as a gradual bid to meet the exchange’s free float requirement. The company currently has less than 10% of its shares as free float instead of the regulatory required 20%.
The company sold 128.5 million shares at N210 in November and last August sold a 2.3% stake to foreign investors for a purchase consideration of about N86 billion. DIL had in 2013 sold a 1.5% stake in Dangote Cement to South Africa’s Public Investment Corporation (PIC) for $289.3 million and a 1.4% stake in Sovereign Fund Investment Corporation of Dubai in 2014 for $300 million.
The Nigerian Stock Exchange, last July approved a block divestment of about 852,025,370 ordinary shares of 50k each representing 5% Equity Interest in Dangote Cement Plc. This latest trade appears to be the final trade for the block sale.
Africa’s richest black man, Aliko Dangote, indirectly owned about 90% of the 17 billion ordinary shares of the company, via its holding company, Dangote Group Plc.
The Nigerian stock exchange rules requires that companies on the Main Board comply to a free float of 20% of market capitalisation while companies on the Premium Board is 20% of market capitalisation or above N40 billion on the date The Exchange receives the Issuer’s application to list.
However, waivers are granted if The Exchange believes that the market can operate properly with the existing level of free float and available securities, and
if it receives an undertaking from a majority holder of shares in the company holding a number of securities equivalent to at least 5% of the issued shares, to make available to the investing public a specific number of securities, required to restore the Issuer to the required free float level within a period not exceeding three (3) years.