12 May 2017

Kenya: Atlas African Industries Suspended From Nairobi Bourse As Woes Pile Up

The Nairobi Securities Exchange (NSE) has now suspended Atlas African Industries from trading at the bourse for a period of 90 days effective May 8.

NSE chief executive officer Geoffrey Odundo attributed the decision 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).

Atlas' suspension at the London bourse was to last until it hired a new Nomad.

However, the company in October last year hinted it was uncertain the appointment would be done, adding then that it was focused at listing at another exchange other than the London Alternative Investment Market (AIM).

Share trading halted

In line with troubles at the LSE, the trading of shares in the company had also been halted on the NSE's Growth Enterprise Market Segment (GEMS) where it had locally been listed, making its stock illiquid for existing and prospective shareholders.

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.

On Friday, Mr Odundo said NSE had continually engaged the company with aim to resolve the issue of non-compliance "in the best interests of its shareholders" to no avail.

"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 8 May 2017," said Mr Odundo in a statement.

He said during the suspension period, 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."

Listing obligations

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.

The loss-making Atlas has had a troubled short history since listing on the NSE in December 2014.

The firm shut down its Kenyan operations in 2015 to focus on growing its Ethiopian business.

However, its entry into Ethiopia through the acquisition of TEAP Glass turned problematic after the subsidiary was embroiled in a tax dispute.

The Ethiopian Revenue and Customs Authority seized $2.4 million from the subsidiary's account to clear the tax liability.

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