The suspension of Atlas African Industries deals a blow to investor confidence at the bourse following Atlas’ brief but rocky listing period.
NSE chief executive officer Geoffrey Odundo in a Friday statement attributed the suspension to the firm’s unresolved issues at the London Stock Exchange where it was suspended on October 17 following the resignation of its nominated adviser (Nomad).
Shareholders of troubled betting firm Atlas African Industries #ticker:ADSS are facing three months in the cold after the Nairobi Securities Exchange (NSE) suspended the company from trading.
The suspension deals a blow to investor confidence at the bourse following Atlas’ brief but rocky listing period.
The loss-making Atlas was listed on the NSE in December 2014, but shut down its Kenyan operations in 2015 “to focus on growing its Ethiopian business.”
“As far as I am aware existing shareholders have already been diluted practically to nothing. Therefore, this suspension is a ‘last rites’ scenario, in my opinion,” said investment analyst and Rich Management CEO Aly-Khan Satchu.
The Atlas management did not respond to our queries by the time of going to press.
The Ethiopian Revenue and Customs Authority seized $2.4 million (Sh243.4 million) from the subsidiary’s account to clear the tax liability.
The company’s management then announced that it would venture into betting business. Atlas, which is listed on the NSE’s Growth Enterprise Market Segment (GEMS), has a float of 1.5 billion shares valued at Sh1.05 each — giving the firm a market capitalisation of Sh1.6 billion.
NSE chief executive officer Geoffrey Odundo in a Friday statement attributed the suspension to the firm’s unresolved issues at the London Stock Exchange where it was suspended on October 17 following the resignation of its nominated adviser (Nomad).
“The Capital Markets Authority has directed the Exchange to revise the status of Atlas African Industries Limited from a security halt and now suspend trading of the shares for an initial period of 90 days effective May 8, 2017,” said Mr Odundo. The decision rocked remaining hopes of existing shareholders that Atlas would resume trading.
Mr Satchu added that the resignation of the company’s Nomad last year “was a very big signal” to Atlas’ piling woes.
Atlas’ suspension at the London bourse was to last until it hired a new Nomad.
However, the company last October hinted it was uncertain the appointment would be done, adding then that it was focused on listing at another exchange other than the London Alternative Investment Market (AIM).
Atlas said earlier its Nomad, Stifel Nicolaus Europe Limited, resigned because its specialty in the oil and gas industry did not match the company’s current principal activity of sports betting.
Among other roles, a Nomad advises its clients on their listing obligations, including compliance with the Capital Markets (Securities) (Public Offers, Listing and Disclosure) Regulations, 2002.
On Friday, Mr Odundo, said the NSE had continually engaged the company with the aim of resolving the issue of non-compliance “in the best interests of its shareholders” to no avail.
Mr Odundo said during the suspension period, the NSE will continue to engage the company towards “achievement of an orderly resolution of the company’s affairs with particular respect and attention to the interests of its shareholders at the Exchange.”
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