Almost a year after PZ Cussons Ghana Limited announced its intention to de-list from the Ghana Stock Exchange subject to Shareholder approval, and approval from relevant industry regulators, it has finally completed the process and will no longer be a part of the local bourse effective 19th October 2020.
At the time PZ Cussons announced its decision to delist from the Ghana Stock Exchange in 2019, the company said it was in line with its plans to achieve operational efficiency, by providing management more time and resources to focus on running and expanding the business, its distribution network and reach, thereby ensuring consumer satisfaction.
It also added that the proposed De-Listing was not expected to impact job security, day-to-day operations and relationships with stakeholders.
The delisting according to PZ Cussons follows the successful settlement of all tendering shareholders, a process which saw PZ Cussons (Holdings) Limited, mop up shares tendered on the market by shareholders, making the company the majority shareholder now, holding over 160.4 million shares, representing 95.50% of the issued shares of PZ Cussons.
Delisting on GSE: Companies urged to strengthen corporate governance systems
The increasing number of companies delisting from the Ghana Stock Exchange (GSE) has been attributed to the failure of the companies to deliver dividends as well as share price appreciation.
That’s according to the head of Research at Databank, Alex Boahen.
Since 2017, about 8 companies have had their listing on the Ghana Stock Exchange suspended or have on their own initiated their delisting from the local bourse.
While companies like Mechanical Lloyd and PZ Cussons voluntarily delisted, others like Pioneer Kitchenware, African Champion Industries, Golden Web, Transactions Solutions Ghana and UT Bank underwent compulsory delisting.
Speaking on the recent delistings from the local bourse, Alex Boahen, attributed the situation to a plethora of issues including the poor performance of the companies.
“The reason why investors invest in companies is because they want the companies to be profitable so that they can pay dividends to them. They want their share prices to actually appreciate on the market so that they can make capital gains when they sell their stock. But if you look at it, recently these companies have actually failed to deliver both dividends and also share price appreciation, and it stands to reason that when it gets to a point, it’s probably in the interest of the shareholder and investor community for these companies to actually go off the market so that they can leave the public spotlight and then they can re-strategize and when things actually improve they can always come back and apply and list on the market again.”
While encouraging the about 30 companies still on the local bourse to strengthen their corporate governance systems as well as improve their operations in order to avoid being delisted, Alex Boahen also advised other businesses to consider listing on the Ghana Alternative Market, GAX, to avoid the strict compliance standards of the main market.
“I’ve always seen the call encouraging companies to list on the market as a brilliant idea. I think it needs to be pushed more so that at least we can get a lot more SMEs coming unto the market, especially the GAX. The rules on the GAX market is actually a bit more relaxed than on the main market because even in terms of financial reporting the GAX companies do their reporting twice in a year whiles on the main market, you report four times in a year. So I will advise that some of these companies can repackage themselves and list on the GAX if possible.”