LAGOS FEBRUARY 14, 2017 – The Asset Management Corporation of Nigeria (AMCON) has sold the fourth largest equity stake in Paints and Coatings Manufacturers Nigeria (PCMN) Plc to Bizfeat Ventures Limited.
Details obtained by The Nation indicated that AMCON, the bad-debt resolution corporation floated by the government, transferred its 7.4 per cent equity stake in PCMN to Bizfeat Ventures through a negotiated cross deal at the Nigerian Stock Exchange (NSE), where PCMN is quoted.
The block divestment involved transfer of a total of 58.66 million ordinary shares of 50 kobo each held by AMCON to Bizfeat Ventures at a negotiated price of N1.05 per share. The divestment price represents a premium of 61.54 per cent on PCMN’s market price of 65 kobo and five per cent above one-year highest price of N1.
A percentage shareholding of up to five per cent and above is designated as major shareholding under the extant rules at the stock market. Such transactions must be disclosed to the authorities at the stock market as they are deemed as material transactions that could lead to changes in board, management and shareholding structure.
The AMCON-PCMN deal was done through the negotiated cross deal platform of the Exchange, a special-purpose trading platform that is meant for voluminous transaction equivalent to five per cent or more of the issued shares of any company. By the cross deal, it implies that the buyer and the seller had been prearranged and the transfer at the stock market was a mere perfection of the agreement between the two. The negotiated cross deal allows the parties to the deal to close the deal at reduced cost. AMCON had previously used the same window for block divestments in several companies.
Many authoritative sources at the market described Bizfeat Ventures as unknown and global internet search did not throw up any information on the company. A review of the related corporate reports also did not establish any previous link or shareholding between PCMN and Bizfeat Ventures.
The Nation’s investigation indicated that the disposed shares, the fourth largest single shareholding in the PCMN, resulted from the bad loans related to the defunct Intercontinental Bank Plc.
The PCMN divestment was a continuation of divestments from quoted companies by AMCON.
AMCON is reported to be the second largest holder of quoted equities after the pension industry. The bad-asset resolution company had invested more than N3 trillion in the purchase of non-performing loans and recapitalisation of banks, which yielded direct and indirect shareholdings in the banks and non-financial companies.
With quoted and unquoted shares as collaterals for several bad loans taken over by AMCON, the company has shares in nearly all banks and several quoted companies. AMCON had previously sold major stakes in Union Bank of Nigeria and Wema Bank among others.