Union Bank Nigeria Plc and ten other listed companies of the one hundred and eighty (180) companies quoted on the Nigerian Stock Exchange are operating below listing standards (BLS) Business Times findings have revealed.
According to the Nigerian Stock Exchange (NSE), these companies have been pegged BLS for continuing operations with deficiencies regarding Continuing Listing Standards.
These companies with free float deficiencies are African Paints Plc, A.G. Leventis Plc, Capital Hotel Plc, Chellerams Plc, Caverton Offshore Support Group Plc, Great Nigerian Insurance Plc, Infinity Trust Mortgage Plc, Interlinked Technology Plc, Nigerian Ropes Plc, Transcorp Hotels Plc, Union Bank of Nigeria Plc.
Nigerian Ropes Plc with 13.96 percent in free float and compliance due date overdue (7th January 2015) has notified The Exchange of its intention to delist from the Daily Official, Capital Hotel Plc with free float of 2.23 percent and compliance due date of 20 April, 2016 and Interlinked Technology Plc with free float of 14.26 percent and compliance due date of 31 December 2015 have applied to The Exchange for extension of time, while Great Nigerian Insurance Plc with 16 percent of free float and Chellerams Plc with 14.87 percent of free float have two weeks (until 8th July, 2016) to comply.
Caverton Offshore Support Group Plc is operating with 17.40 percent in free float and Infinity Trust Mortgage Plc 1.13 percent have until 31st December, and 31st October respectively to comply while A.G. Leventis Plc, Union Bank of Nigeria Plc, Transcorp Hotels Plc and African Paints Plc. have until March, June and December 2017 as respective dates to comply with minimum requirement of free float.
The free float requirement for companies listed on the NSE main board is 20 percent, while for companies in the Alternative Securities Market (ASeM) is 15 percent.
The NSE had directed companies to provide quarterly disclosure reports to the Exchange detailing their level of implementation of the compliance plans reiterating that listed companies must maintain a minimum free float for the set standards under which they are listed in order to ensure that there is an orderly and liquid market in their securities.
Free-float which represents the portion of shares of a company that are in the hands of public investors as opposed to locked-in stock held by promoters, company officers, controlling-interest investors, or government, helps to better calculate the market capitalisation of companies because it provides a more accurate reflection (than entire market capitalisation) of what public investors consider the company to be worth.