Atlas African Industries suspended from bourse as adviser quits

Atlas African Industries was yesterday suspended from trading at the London Stock Exchange (LSE) after its nominated adviser resigned.

The company, which offers support services in the oil and gas industry, is also listed at the Nairobi bourse.

The firm risks being completely removed from London’s Alternative Investment Market (AIM), which is reserved for small and growing firms, if it fails to scout for a new broker within a month.

“Atlas African Industries Ltd notifies that Stifel Nicolaus Europe Ltd, the company’s AIM-nominated adviser and broker, has resigned with immediate effect,” read a note sent to newsrooms by the Nairobi Securities Exchange (NSE).

Following the resignation, the LSE suspended Atlas’ securities from trading at 7.30am yesterday. Stifel Nicolaus had been the logistics firm’s advisers for about a year and a half.

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Plunging price

Atlas is listed at the NSE under the Growth and Enterprise Market Segment (GEMS). It was not immediately clear what would happen to its shares at the bourse.

Burbidge Capital, which is the firm’s nominated adviser in Kenya had not responded to our email by the time of going to press, despite an official from the firm requesting emailed questions.

However, the NSE confirmed that it was in discussions with the Capital Markets Authority (CMA) and Burbidge Capital on the decision to take on Atlas’ securities.

Under LSE and NSE rules, a firm listed in AIM or GEMS, respectively, is required to appoint a nominated adviser by written contract and have such an adviser at all times. The adviser acts as a link between the firm and regulators.

This development comes less than two years after the firm was listed at the NSE on December 17, 2014. Its peers in the GEMS sub-market include Nairobi Business Ventures, Home Afrika, Kurwiitu Ventures and Flame Tree Group.

Atlas has not seen the best of times. At the NSE, its share price closed yesterday at Sh1.05, with a 10th of its listing price of Sh11.50. At the London bourse, the counter plunged from £0.55 (Sh67.79) in January to £0.095 (Sh11.7) by the close of trading last week. This is a drop of 82.7 per cent.

In the six-month period to June, the company posted a loss of $34.2 million (Sh3.5 billion), with the firm’s chairman describing it as a most frustrating period for company and shareholders.

The firm shut down its Kenyan operations last year 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 (Sh243.4 million) from the subsidiary’s account to clear the tax liability.