Kwararafa Africa Moves To Acquire Minority Shares In Notore 

Notore Chemical Industries Plc has announced a significant development in its ownership structure with an offer from Kwararafa Africa Limited to acquire shares held by the company’s minority shareholders.

The notification, issued on November 26, 2024, was signed by the company’s Secretary, Mr. Matthias Ogwuche, and published on the Nigerian Exchange Limited (NGX) disclosure platform. This proposal marks a potential turning point in the company’s corporate strategy.

Kwararafa Africa Limited is working in collaboration with TY Holdings Limited and Notore Chemical Industries (Mauritius) Limited, collectively referred to as the “Core Shareholders.” Together, they aim to acquire all shares held by minority investors in the company. The statement highlights that Kwararafa Africa Limited, in concert with its partners, is seeking to consolidate ownership under the Core Shareholders.

In the announcement, Notore noted, “Notore Chemical Industries Plc (the company) hereby notifies the Nigerian Exchange Limited, the investing public, and our esteemed stakeholders that the company has received an offer from Kwararafa Africa Limited.”

The company further explained that the offer involves “Kwararafa Africa Limited acting in concert with TY Holdings Limited and Notore Chemical Industries (Mauritius) Limited to acquire all the shares currently held by the minority shareholders in Notore, referred to as the ‘Scheme Shareholders.’ ”

This proposal, if successful, will streamline ownership and potentially set the stage for strategic transformations within Notore Chemical Industries Plc.

The acquisition process will be carried out through a scheme of arrangement, a legal framework that will require multiple levels of approval. These include regulatory clearance from the Securities and Exchange Commission (SEC), a court-ordered meeting where shareholders will vote on the arrangement, and final sanctioning by the Federal High Court. Details of the proposed transaction will be shared with shareholders in a formal document following initial regulatory and judicial approvals. Notore has assured stakeholders that further updates will be provided as the process advances.

The proposed acquisition comes against a backdrop of financial difficulties for the company. In the third quarter of 2024, Notore reported a pre-tax loss of ₦82.1 billion, a 191 percent increase from the ₦28.2 billion loss recorded in the same period in 2023. The losses were largely attributed to rising finance costs. Revenue also saw a steep decline, falling from ₦4.7 billion in Q3 2023 to just ₦191.2 million in Q3 2024. For the nine-month period ending September 30, 2024, total revenue stood at ₦598.9 million, with revenue from urea and other chemicals plunging from ₦10.8 billion to ₦206.9 million.

Despite these financial setbacks, the market reacted positively to the news of the acquisition. Notore’s share price surged by more than nine percent as of the market opening on November 26, 2024, signalling investor confidence in the potential benefits of the ownership consolidation.

The proposed transaction represents a critical moment for Notore Chemical Industries Plc, as the company navigates financial challenges while exploring new opportunities through a more unified ownership structure.