The CMF has just ordered two groups with listed companies (UADH, GIF FILTER, Loukil Group’s AMS and Fethi Hachicha Group’s Electrostar) to delist from the TSE (Tunis Stock Exchange).
They will thus have to buy back all their free float at prices set by the stock exchange, which will cost these companies, already battered by their own economic situation and that of the markets in which they operate, a great deal of money. The Loukil Group will have to repay its former shareholders more than TND 7 million and Fethi Hachicha just over TND 456,102,000.
Private operators prosecuted and sentenced
The CMF (Financial Market Council) stated in its explanatory memorandum that “the situation of these companies represents a growing risk to the interests of shareholders due to repeated non-compliance with the obligation to publish financial information imposed by the laws and regulations in force”.
The last balance sheet published by AMS, a company undermined by forgery and killed by COVID, was in 2019. It showed a deficit of 28.924 million Tunisian dinars, including 8.6 million Tunisian dinars in salary costs and 7 million Tunisian dinars in net financial costs.
In the case of Gif-Filter, which it tried to rescue after the death of its original promoter, the last balance sheet dates back to 2020 and shows a deficit of more than TND 5 million; its auditors had already pointed out the “significant uncertainty regarding the continuity of operations” and the tax authorities were already on the spot for an in-depth audit.
For the group’s holding company (UADH), the latest balance sheet dates from 2017, but showed a profit of TND 6.659 million, down sharply from TND 12 million in 2016, and only TND 365 thousand consolidated for the 2017 financial year. In any case, the group’s decline will become inevitable when the French manufacturer Citroën withdraws its dealer card in Tunisia.
For the flagship company of the Hachicha group, the tightening of bank loans, which targeted it, and the tax authorities, which did not allow it any respite, had certainly finally outstripped Electrostar’s resilience. The balance sheet for the 2020 financial year, published in August 2022, showed falling revenues and an operating loss almost as high as revenues, and a net loss of TND 16.3 million, not counting the TND 37.64 million in negative retained earnings.
State-owned Tunisair remains untouchable!
There can be no doubt that the CMF was simply ridding the TSE of a few lame ducks whose difficulties persisted and who, for internal and external reasons, were unable to get back on their feet.
However, it is important to remind the CMF, the stock market watchdog, that these five companies that it is forcing to make public takeovers are far from being the only lame ducks on the stock market, and far, far from being the only ones that represent “an increasing risk to shareholders’ interests”, as it says for the five private companies.
Indeed, the biggest lame duck on the stock market remains Tunisair. According to TSE data, its share capital stood at TND 106.199 million in 2017. A year later, in 2018, the year of its last published balance sheet (editor’s note: in total disregard of the principle of transparency in financial communication that the CMF claims to defend), it showed a deficit of TND 234.382, more than twice its share capital. We still don’t know anything about its accumulated losses. In any case, Tunisair has never published a balance sheet since then, neither individual nor consolidated, as it has long since become a group. Since then, Tunisair has only published quarterly indicators, which distort the company’s overall financial picture.
Tunisair went public in July 1995 through a public offer of 900,000 shares (20% of the capital) at a price of TND 23.5. In 2017, its market capitalization was estimated at TND 82.84 million. In July 2023, according to Mac SA, the company’s market capitalization will be only TND 44.6 million. Six years ago, its highest share price was less than one dinar (TND 0.930). What’s more, the company has almost never paid dividends (at least since 2017, according to the TSE), nor has it been able to use the stock market to raise funds.
Tunisair’s stock is currently trading at TND 0.420. When it went public, the 20% free float was worth more than TND 21.1 million. Today, that 20% is worth just TND 387,000. All this and the CMF still refuses to consider that Tunisair is just as ‘guilty’ as the five private companies and should also be subject to the application of Article 157 bis of the CMF. Would this article be removed or would it not be countered by the government’s desire to maintain the status quo for lack of money? After all, a public takeover bid for Tunisair would cost the state budget an arm and a leg (to put it mildly), and that for a company in dispute with its regulator!
