Arbico Plc, a prominent civil engineering contracting company primarily owned by Nigerian gambling magnate Kessington Adebutu, has announced its plans to voluntarily delist from the Nigerian Exchange Group (NGX).
This decision comes in the wake of significant financial challenges faced by the company, including a substantial depletion of shareholders’ funds.
Kessington Adebutu’s influence and Arbico’s financial struggles
Kessington Adebutu’s name is synonymous with success in the Nigerian gambling industry, with his enterprise, Premier Lotto, standing as a testament to his business acumen. However, his company Arbico has not been immune to the financial difficulties plaguing the Nigerian construction sector.
The company’s unaudited financial results for the 2023 fiscal year revealed losses amounting to N1.49 billion ($1 million), a stark contrast to its previous years of profitability.
The decision to delist and the challenges ahead
The move to delist is part of Arbico’s strategy to navigate its current financial predicament. The company has scheduled an Extraordinary General Meeting (EGM) for March 21, 2024, where it will propose the voluntary delisting from the NGX. This proposal includes plans for remitting the Scheme Consideration to shareholders, subject to regulatory approvals and compliance with applicable requirements.
The decision to delist marks a significant transition for Arbico, as it moves from a period of profitability to grappling with nearly N2 billion ($1.25 million) in retained losses. The company has been in consultation with regulatory authorities and stakeholders to ensure a smooth transition from the NGX.
Adebutu’s legacy and Arbico’s future
Kessington Adebutu’s impact on Nigeria’s financial landscape extends beyond Arbico, with a notable 28.15 percent stake in Wema Bank Plc through his investment vehicle, Neemtree Limited. As Arbico prepares for its delisting, the focus is now on how the company will address its financial challenges and what the future holds for Kessington Adebutu’s business empire.
The voluntary delisting of Kessington Adebutu’s company, Arbico, from the NGX is a reflection of the financial hurdles the company faces. As stakeholders and observers await the outcome of the upcoming EGM, the situation underscores the volatile nature of the construction industry in Nigeria and the challenges even well-established companies like Arbico encounter.
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