Nigerian Stock Exchange Wednesday lifted the full suspension placed on shares of Cadbury Nigeria Plc, following the conclusion of the companyâ€™s capital reduction exercise.
Cadbury had embarked on the reduction of its capital base by about N12 billion under a plan that was approved by the shareholders last year. The exercise was expected to result in the cancellation of two of every five ordinary shares held by investors.
But in order to comply with the requirements of the court sanctioned reduction approval, Cadbury requested the NSE to place the shares on full suspension. As a result, the stock has been on suspension since January 8, 2014.
However, the suspension was lifted yesterday following the full compliance with the exercise and the issuance of the certificate of decrease in capital by the Corporate Affairs Commission (CAC).
The company informed the NSE that all actions required to make the capital reduction effective had been completed with the successful filing of the court sanction with the CAC.
According the Cadbury, by achieving the effective date, the authorised share capital of the company is now reduced by 1,252,172,198 shares from 4,000,000,000 shares to 2,747,827,724 shares while the issued share capital of the Company is also reduced by 1,252,172,198 shares from 3,130,374,238 shares to 1,878,202,040 shares. Cadbury said the post capital reduction price per share is N90.78.
Based on the above information, the NSE said â€œthe suspension placed on the companyâ€™s share price has been lifted effective today, February 19, 2014.â€
United Kingdom-based Cadbury Schweppes Overseas Limited (CSOL), the majority core investor in Cadbury Nigeria, holds 74.99 per cent equity stake in Cadbury Nigeria.
Under the capital reduction plan, Cadbury Nigeria will returned excess capital of N11.9 billion to its shareholders by cancelling two out of every five ordinary shares currently held by the shareholders. This eventually reduce the share capital account by an amount equivalent to the par value of the cancelled shares and share premium accounts by about N11.27 billion.
Also, each shareholder will receive returned capital per cancelled share at N9.50 per share. Although some Nigerian minority shareholders had kicked against the capital reduction, the board of the company said the exercise was necessitated by current cash position of the company in relation to its operations and the need to optimise return on capital.
According to the board, it had assessed the companyâ€™s current financial position including liquidity and amounts due to creditors as well as possible capital investments and near-term growth opportunities and came to the conclusion that the company has more capital than it required now or in the near future.