MRS Oil Nigeria Plc has announced plans to voluntarily delist its shares from the Nigerian Exchange Limited (NGX) following a strong financial performance in 2024.
The decision, which was approved by shareholders at an Extraordinary General Meeting (EGM) held on June 25, 2024, comes at a time when the Nigerian stock market is experiencing renewed momentum, with the All-Share Index (ASI) recording steady gains.
The company reported a significant 71.2% increase in revenue, reaching N312.2 billion, and a profit after tax of N6.49 billion, marking a 62.2% year-on-year growth. These robust results reflect MRS Oil’s strong market positioning, particularly following its strategic purchase of refined products from the Dangote Refinery, which has attracted fuel-efficiency-conscious customers.
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Despite these positive financial outcomes, MRS Oil cited several reasons for its decision to exit the NGX, including the rising costs of maintaining a public listing, the need for greater operational flexibility, and the challenges posed by the full deregulation of Premium Motor Spirit (PMS). The company acknowledged that while the recent deregulation has led to higher fuel prices and lower sales volume, overall revenue growth has remained strong enough to offset these declines.
Following its delisting, MRS Oil plans to migrate its shares to the NASD OTC Securities Exchange, a platform that facilitates the trading of unlisted securities. This will allow existing investors to continue trading their shares while enabling the company to focus on long-term growth without the regulatory burdens of a public listing.
Share Buyback and Capital Reduction for Shareholders
As part of the delisting process, MRS Oil will initiate a share buyback and share capital reduction program, aimed at providing an exit opportunity for dissenting shareholders who do not wish to remain invested after the delisting. The company has set aside the necessary funds to compensate these shareholders, with the claim period running from April 4 to July 4, 2025. Shareholders who do not opt for the buyout within this window will have their shares automatically migrated to the NASD OTC Exchange.
MRS Oil has assured investors that the entire delisting process will comply with all necessary regulatory approvals from the Securities and Exchange Commission (SEC) and the NGX. The company also emphasized that this strategic move will allow it to streamline operations and focus on long-term growth strategies without the restrictions associated with being a publicly listed company.
Part of a Broader Market Trend of Corporate Exits
MRS Oil’s exit follows a growing trend of companies delisting from the NGX in recent years, citing similar challenges such as high compliance costs, low trading liquidity, and macroeconomic instability. Notable exits include GlaxoSmithKline (GSK) Consumer Nigeria Plc, which delisted in 2023 due to strategic business reviews and operational constraints; 11 Plc (formerly Mobil Oil Nigeria), which left the NGX in 2021 and transitioned to the NASD OTC Securities Exchange; and Union Diagnostics, which also delisted, opting for private ownership.
Before its announcement, MRS Oil had a market capitalization of approximately N59 billion, contributing to the overall NGX market size of N63 trillion. Its departure further underscores wider concerns about the NGX’s ability to retain listings, particularly from mid-sized and multinational companies facing operational challenges in Nigeria’s economic landscape.
Analysts have warned that the steady stream of corporate exits reflects deeper structural problems within the Nigerian capital market, which may require urgent reforms to improve investor confidence and retain listings.
Delisting Comes Amid Market Gains
MRS Oil’s decision to delist coincides with a rally in the Nigerian stock market, with the All-Share Index (ASI) recording an increase of 244.24 points on March 28, 2025, closing at 105,670.36 points. This represents a 0.23% increase from the previous day’s figure of 105,426.12 points. The market capitalization also grew to N66.2 trillion, up from N66.1 trillion the previous day, reflecting increased investor activity. Daily trading volume surged to 544 million shares, compared to 423.6 million shares recorded the previous day, signaling renewed investor confidence.
Among the biggest gainers were UPDC and ABBEYBDS, each soaring by 10 percent, while INTENEGINS and AFRIPRUD led the losers’ chart with 10 percent declines.
UPDC saw its price rise to N2.97, while ABBEYBDS closed at N4.73. NNFM also recorded a strong gain of 9.96 percent, ending the day at N87.75. MBENEFIT followed with a 9.38 percent increase, reaching N1.05, while ROYALEX advanced by 8.25 percent to close at N1.05.
On the losing side, INTENEGINS fell to N1.62, and AFRIPRUD dropped to N13.05. CADBURY recorded a 9.42 percent loss, closing at N23.55, while UPDCREIT declined by 9.09 percent to N5.50. RTBRISCOE also saw a decline of 7.69 percent, ending at N2.40.
Trading volume remained high, with MBENEFIT leading at 73.9 million shares, followed by CUTIX with 72 million shares. GTCO recorded 67.8 million shares, while FIDELITYBK saw 47.5 million shares exchanged. UNIVINSURE also recorded significant activity, with 33 million shares traded.
In terms of value, ARADEL led the market with transactions worth N6.4 billion, followed by GTCO with N4.5 billion. NESTLE and GEREGU facilitated trades worth N2.3 billion and N2.2 billion, respectively, while ZENITHBANK recorded N1.1 billion in transactions.
Market Outlook: ASI Pushes Towards 106,000 Points
The Nigerian All-Share Index (ASI) is attempting to break past the 106,000 mark, as market sentiment shows signs of renewed optimism following weeks of corrections. Analysts note that this market rebound could provide opportunities for investors to enter at more favorable price levels.
However, despite the gains in the broader market, MRS Oil’s delisting underscores lingering concerns about the NGX’s ability to retain companies. With ongoing economic challenges such as foreign exchange volatility, inflation, and high operational costs, businesses may continue to rethink the benefits of maintaining public listings.
While MRS Oil has assured shareholders that it will provide updates throughout the delisting process, the pattern of corporate exits suggests deeper structural issues that may require urgent reforms to restore investor confidence in the Nigerian capital market.
