The National Industrial & Commercial Investments Limited (NICIL) yesterday announced that it has placed its 6,099,927 equity shares in Guyana Stockfeeds Incorporated on the local stock market.
The announcement follows a row that erupted between the APNU+AFC administration and the opposition over the valuing of a tranche of its shares which Guyana Stockfeeds recently purchased from the government.
In a statement yesterday, NICIL said that the placement of the shares on the stock market comes after previous attempts to dispose of them failed. It said that the current majority shareholder, Robert Badal, the Head of Stockfeeds was the only person to make an offer for the shares held by NICIL when they were first advertised for sale.
The statement said that the placement of the shares on the local stock exchange also signals a shift in strategy by NICIL, and an effort to widen shareholding by providing more opportunities for the Guyanese public to invest in public companies.
NICIL said it believes that the placement of the shares on the local market will greatly contribute to the depth, diversification and enrichment of the local stock market coupled with the “copious potential” investment gains to the general public which is likely to ensue.
Acting CEO of NICIL, Colvin Heath-London, said that “NICIL is enthusiastic about public participation in the local stock market and intends to give every Guyanese an opportunity to grow their money, maximise their returns and have a legitimate chance to acquire state assets that are being diversified.”
The statement said that there are many families which have owned shares in companies like Demerara Distillers Limited and Banks DIH for generations after parents or grandparents bought shares decades ago. However, for many decades new opportunities were not provided for the same type of stock ownership and transfer of wealth from one generation to another. Heath-London added that “we at NICIL would also like to invigorate the local stock market by giving it depth and robustness that will be attractive to global companies. One of the benefits of the boom in oil and gas should be that global companies that come here to operate see a vibrant market for stocks and get listed on our exchange. Such cross-listing with our local exchange would open up opportunities for Guyanese to invest in these companies and benefit from their profitability.”
The statement noted that since the NICIL shares in Stockfeeds surfaced in the public domain recently there has been vigorous discussion of the value of the shares versus the value of the offer made by the majority shareholder. NICIL is of the view that now that the shares have been placed on the stock exchange, the market will eventually determine the true value of the shares.
Badal recently defended the price at which he acquired the 3,890 shares that the government divested.
“At $25 per share it is way over the $15 I was initially prepared to offer. It is way over the local stock exchange last sale price. The total value for these shares was more than what I paid for 35% of the company when I first took over its management. The fact that no other buyer made any bid during an open tender means that no one was interested in a minority stake in the company and that its value to a rational buyer was not there. Regardless of what valuation was done and by whom means nothing without a willing buyer”, he said in a letter to this newspaper.
