Premier Paints Plc, a prominent Nigerian paint manufacturer, has announced that its majority shareholders are in advanced discussions with Xenergi Limited for the potential divestment of a significant 51% equity stake. This proposed transaction, if concluded, would transfer control of 63 million shares to Xenergi, marking a pivotal development for the company currently under trading suspension on the Nigerian Exchange (NGX).

The deal, formally communicated to the NGX and the investing public, awaits crucial regulatory approvals and targets completion by January 31, 2026. The shareholders involved in this divestment are Clover Global Resources Limited, which holds a substantial 39.02% stake in Premier Paints, and TGHL Capital Limited, with a 15.20% holding.

Their combined divestment of 63 million shares would consolidate majority ownership under Xenergi Limited, a move that could significantly reshape Premier Paints’ strategic direction and operational landscape. This aligns with the broader trend of corporate restructuring within Nigeria’s industrial sector.

Premier Paints Plc has long been a key player in Nigeria’s manufacturing sector, specializing in a diverse range of paints for decorative, industrial, and commercial applications. Its product portfolio includes marine, wood, automotive, solvent, and road-marking paints, serving various segments of the economy. The company operates as a subsidiary of the Nigeria-based Trans Global Holding Limited and was previously associated with Red Sea Housing Services, reflecting its established presence and history in the market.

Listed on the Nigerian Exchange under the Industrial Goods sector and specifically within the Building Materials subsector, Premier Paints Plc previously held a market capitalization of approximately N1.23 billion. This valuation was based on its 123 million outstanding shares, each priced at N10. However, the company’s shares have remained static at N10 per share since 2022, with no trading activity recorded on the NGX following a significant regulatory suspension that has impacted its market liquidity.

The prospective acquirer, Xenergi Limited, is a member of the Oildata Energy Group, a conglomerate with diversified interests in the energy sector. Xenergi’s primary business revolves around the innovative conversion of natural gas into cleaner energy products. This includes the production of liquefied petroleum gas (LPG), propane, and various mixed alcohols, positioning Xenergi at the forefront of sustainable energy solutions and potentially bringing a fresh strategic perspective to Premier Paints.

Should the acquisition proceed, Xenergi Limited would secure a controlling 51% stake, granting it majority ownership, significant voting rights, and substantial influence over Premier Paints’ governance. This includes the power to shape board appointments, oversee operational decisions, dictate corporate strategy, and drive future expansion plans. Such a change in leadership could usher in a new era for Premier Paints, potentially revitalizing its market presence and addressing its current challenges.

Premier Paints Plc has been under a trading suspension on the Nigerian Exchange since July 1, 2022. This regulatory action was imposed by the Nigerian Exchange Regulation Limited (NGX RegCo) due to the company’s failure to file its audited financial statements for the year ended December 31, 2021. This non-compliance with crucial post-listing disclosure requirements led to the suspension of trading in Premier Paints’ shares, alongside eight other companies, highlighting the NGX’s commitment to market integrity.

Despite the ongoing suspension, Premier Paints’ last published financials on the NGX, specifically for Q4 2024, showed a pretax profit of N565,000. This represented a notable rebound from a year-on-year loss of N8.2 million, offering a glimpse into the company’s operational performance prior to the full impact of its compliance issues. This financial data, though dated due to the suspension, provides some context to the underlying business.

The proposed acquisition by Xenergi Limited carries significant implications for Premier Paints’ future. It could potentially inject new capital, expertise, and strategic direction, influencing key decision-making processes and operational contributions that are vital for the company’s growth and expansion plans. A successful acquisition might also pave the way for Premier Paints to address its regulatory non-compliance, aiming for an eventual lifting of its trading suspension and a return to active market participation. This strategic alliance could redefine its trajectory in the Nigerian industrial landscape.

Read Original

Keywords: Premier Paints Plc, Xenergi Limited, 51% stake sale, Nigerian Exchange NGX, corporate acquisition, trading suspension, industrial paints, Oildata Energy Group