VENTURES AFRICA – Shareholders of leading Nigerian lender, Zenith Bank Plc, have endorsed the move by the financial institution to effect a dual listing of its shares on the London Stock Exchange (LSE) through a Global Depository Receipt (GDR).
The approval which was given on Wednesday at the bank’s Extra-ordinary General Meeting (EGM) in Lagos will see the GDR raise liquidity for the company from emerging markets.
Earlier in the month, reports reveal the level of interest in Nigerian companies from global investment houses operating out of London has grown significantly, particularly in the last couple of years.
LSE’s Head of Business Development for the Middle East and Africa, Ibukun Adebayo, commented that: “there’s been a distinct pick up in terms of the value that African countries see in having a LSE listing.”
Profile upgrade, increased liquidity and visibility, have been identified has three of the major values the local companies benefit from international listing.
ThisDay reported Zenith Chairman, Mr. Steve Omojafor, said that the dual listing of the lender on the London bourse would give the company access to foreign investors, particularly Global Emerging Markets (GEM) and other specialist investors, thus increasing visibility.
According to him, the listing “will also give additional comfort to investors as a result of the London Corporate Governance standards, increase coverage by international analysts and increasing demand for Zenith Bank stock from international GEM investors, which will enhance liquidity and valuation and lead to a perception of ‘best in class’ corporate governance.”
“This will also increase liquidity of our Shares, which brings greater ability to use international debt/equity market for future capital raises, lowering cost of capital,” he added.
Zenith will be joining four other Nigerian banks if its move to trade public on the London market succeeds, however, it is subject to regulatory approval by local authorities.
Nigerian Companies on LSE
On July 26, 2007, Guaranty Trust Bank (GTB) became the first sub-Saharan bank and first Nigerian joint stock company, listed on London Stock Exchange and Deutsche Börse. The IPO raised $750 million. Nigeria-based Diamond bank’s listing followed on January of the preceeding year.
In September, the West Africa-focused energy group Eland Oil & Gas became the largest company to float on the LSE’s Alternative Investment Market (AIM), after raising $188 million following a partnership with local oil firm Starcrest to buy a stake in a Nigerian oil block.
Currently, the five Nigerian companies listed on the London bourse are worth a total of $3.5 billion.
In April, Africa’s richest man and Chairman of Dangote Group, Aliko Dangote, announced he intends to free- float a 20 percent stake in the $11 billion cement company to finance its rapid expansion in 2013. The company appointed Morgan Stanley and JPMorgan as co-leads for the London share issue. However, analysts predictions point to late 2013 as the earliest time for the public issuing as Dangote Cement is struggling to satisfy LSE’s strict main market corporate governance requirements.
According to report, quotes Andy Gboka, equity research analyst for sub-Saharan Africa at Exotix states: “Dangote, if finally completed, could be the first Nigerian name to have a direct listing in London.”