Financial factors play a central role in understanding delisting decisions (Chaplinsky & Ramchand 2012). Companies with high leverage, reflected in the debt-to-equity (D/E) ratio, experience increased financial risk and are more likely to delist. Similarly, low market-to-book (M/B) ratios and insufficient capital expenditure relative to sales (CAPEX-to-Sales) signal weak investment capacity and poor market valuation, both of which are associated with higher delisting risk (Croci & Giudice 2014). Additional indicators of financial health include the assets-to-equity (A/E) ratio, which measures shareholder-funded assets (Choi, So & Wang 2021), and the debt-to-assets (D/A) ratio, which reflects the extent of debt financing (Croci & Giudice 2014). Book value per share (BVPS) and total debt per share (TDPS) provide per-share insights into net asset value and debt burden (Benny & Htuagaol 2013). The long-term debt to total capital ratio (LT_D:Total capital) assesses capital structure risk (Bessler et al. 2012), while the cost of debt and weighted average cost of capital (WACC) represent the effective borrowing rate and expected investor returns (Chaplinsky & Ramchand 2012).

Agency conflicts, particularly those involving free cash flow (FCF), are prevalent in firms with limited growth opportunities (Jensen & Meckling 1976). Excess FCF may lead to inefficient capital allocation and reduced shareholder value (Farrell, Yu & Zhang 2013). Delisting can mitigate these issues by enabling tighter control over cash flows. Relevant variables include FCF, FCF per share (FCFPS), cash flow per share (CFPS), return on assets (ROA), return on fixed assets (RoFA), return on invested capital (ROIC) and the reinvestment rate (RiR) (Wahyuni 2021).

Growth potential is another critical factor. Firms with low growth prospects, often measured by Tobin’s Q ratio – the market value of assets relative to their replacement cost – are more prone to delisting (Thomsen & Vinten 2014). High compliance costs, calculated as the sum of external audit and listing fees divided by sales (EAR), may further discourage public listing. Growth-related variables include research and development (R&D)-to-sales ratio, R&D-to-assets ratio, sales growth (S/G) and asset growth (A/G) (Weir, Laing & Wright 2005; Weir, Wright & Scholes 2008; Weir & Wright 2006).

Financial distress, often associated with constrained growth, also increases the risk of delisting (Renneboog, Simons & Wright 2007). Indicators such as the operating cash flow (OCF) margin and the cash flow-to-debt ratio help identify firms under financial strain (Mehran & Peristiani 2010). Smaller firms, particularly those reliant on tangible assets and with limited access to capital, are especially vulnerable.

Information asymmetry – where one party possesses more or better information than another – can lead to adverse selection and inefficient market outcomes (Thompson & Kim 2020). Firms experiencing high asymmetry may opt to delist to avoid these costs (Bharath & Dittmar 2010). Variables such as the intangibility ratio (I/R) and initial public offering (IPO) underpricing are useful in assessing asymmetry-related risks (Bharath & Dittmar 2010).

Company size, financial visibility, liquidity and profitability also influence delisting decisions. Larger firms are better equipped to absorb compliance costs and maintain investor confidence, while smaller firms with high intangible assets may experience financial constraints (Hostak et al. 2013). Size-related variables include revenue, market value and total assets (Kashefi Pour & Lasfer 2013; Ljungqvist, Nanda & Singh 2006).

Low share turnover and high price volatility reduce financial visibility, increasing delisting risk (Mehran & Peristiani 2010). Misalignment between the cost of equity and actual return on equity can depress share valuations and investor interest (Reiter 2021). The cost of equity reflects the return required by investors based on perceived risk, while the return gap highlights performance discrepancies (Thomsen & Vinten 2014).

Liquidity is another key financial determinant. Firms with low current and quick ratios may struggle to meet their short-term obligations, resulting in reduced investor confidence and increased trading costs (Kang 2017). Such conditions often prompt firms to go private. Additionally, profitability remains a fundamental factor in listing sustainability. Companies with a low net profit margin (NPM), operating margin, pre-tax margin, asset turnover (AT) and sales-to-assets ratios are more likely to delist (Hostak et al. 2013). Conversely, larger, more profitable firms with higher trading volumes tend to remain listed (Croci & Giudice 2014).

Despite extensive research on the financial determinants of delisting in developed markets, significant gaps remain regarding how these factors operate in emerging economies, such as South Africa. Existing studies have not adequately examined whether traditional financial distress indicators – such as leverage, liquidity and profitability – have the same predictive power in contexts characterised by macroeconomic volatility, regulatory uncertainty and limited capital market depth. Moreover, the interaction between financial metrics and strategic delisting mechanisms, such as SoAs, remains underexplored, particularly whether financially sound firms may delist for non-distress reasons. This study addresses these gaps by examining financial determinants specifically within the South African context and distinguishing between distress-driven and strategic exits.

Corporate governance, regulatory compliance and company reputation have a significant influence on delisting decisions (Thomsen & Vinten 2014). Poor governance undermines transparency and shareholder protection, thereby increasing the risk of delisting (Konno & Itoh 2018). Governance quality is assessed through chief executive officer (CEO) duality, board composition, size, meeting frequency and director independence (Dwivedi & Jain 2005; Hostak et al. 2013; Ning, Metghalchi & Du 2010).

Chief executive officer duality, where the CEO also chairs the board, is linked to financial distress and higher delisting risk (Hostak et al. 2013). The King IV Report on Corporate Governance discourages this practice unless a lead independent director is present (Lansdell et al. 2025). Chief executive officer tenure stability is also important; frequent changes may destabilise management and reduce profitability (Hwang, Kang & Jin 2014). Key variables include CEO status, tenure and the presence of a lead independent director (Ning et al. 2010).

Board composition affects oversight and agency costs. A higher proportion of independent directors improves governance and reduces delisting risk (Lansdell et al. 2025). Relevant variables include the ratio of executive to non-executive directors, the number of independent directors and whether the chairperson is independent (Salloum, Azoury & Azzi 2013). Board size also matters – larger boards may enhance oversight, while smaller boards offer agility (Darrat et al. 2016). Indicators include the total number of board members, board changes and the percentage change in composition (Malik et al. 2014). Frequent board meetings may also signal increased monitoring of distressed firms, which correlates with a higher delisting risk (Cheng, Aerts & Jorissen 2010). Meeting frequency and attendance rates are key variables (Chou et al. 2013). Adherence to the Companies Act No. 71 of 2008 and King IV principles reinforces fiduciary duties, influencing listing outcomes (Macey & O’Hara 2002).

Agency theory emphasises the importance of aligning managerial and shareholder interests, particularly in firms with dispersed ownership (Renneboog et al. 2007). Misalignment can lead to shareholder activism and increased delisting risk (Croci & Giudice 2014). Executive compensation – through share options and performance-based bonuses – can incentivise alignment (Taj 2016). Insider ownership also plays a role; managers with significant stakes may delist to retain control (Kashefi Pour 2015). Key variables include the percentage of non-public shareholders (Djerbi & Anis 2015).

Institutional investors enhance governance through monitoring and visibility, reducing agency conflicts and delisting risk (Vismara, Paleari & Ritter 2012). Lower institutional ownership in distressed firms is associated with a higher likelihood of delisting (Weir & Wright 2006). Directors appointed by pressure-resistant institutional investors may reduce the risk of business failure (Sallehuddin et al. 2019). Key variables include the percentage change in institutional investors and non-public shareholders (Bancel & Mittoo 2009; Hwang et al. 2014). Free float – the proportion of shares held by public investors – is another important factor. Companies with lower free float are more susceptible to delisting because of reduced market acquisition costs and limited liquidity (Cyert, Kang & Kumar 2002). Key variables include the percentage of public and individual investors (Croci & Giudice 2014).

Executive compensation reflects both incentives and signals of financial distress. In distressed firms, CEOs are often replaced or receive lower compensation (Thomsen & Vinten 2014). Excessive remuneration may indicate agency problems and poor performance (Putri 2021). Key variables include directors’ remuneration as a percentage of sales and assets (Cyert et al. 2002) and CEO compensation relative to operating income, sales and net profit (Konno & Itoh 2018).

Board member biographies can also influence the risk of delisting. Factors such as workload, interlinked directorships, age, education and professional qualifications affect board quality and decision-making (Donker, Santen & Zahir 2009). Women directors are associated with better cash flow and lower debt, while men tend to take more risks (Salloum et al. 2013). Higher education, especially a Master’s in Business Administration (MBA), may enhance governance quality (Djerbi & Anis 2015). Key variables include qualifications, other positions held and CEO age at delisting (Malik et al. 2014).

Analyst coverage and market activity also influence the risk of delisting. Companies with low analyst coverage tend to have shorter IPO survival rates and lower trading volumes, increasing delisting risk (Intrisano et al. 2020). Market index levels and IPO underpricing serve as proxies for investor sentiment and market conditions (Demers & Joost 2007). Key variables include the number and average of analyst recommendations.

While the importance of governance in corporate performance is well established, the specific role of non-financial factors in driving strategic delistings – particularly through mechanisms like SoAs – remains under-examined in emerging market contexts. Existing research has primarily focused on developed markets where governance standards, regulatory enforcement and institutional investor participation differ substantially from those in South Africa. This study addresses this gap by investigating whether governance quality, board characteristics, ownership structures and executive qualifications influence strategic exits differently in a developing economy context, where governance practices may be less mature and enforcement less consistent. Moreover, the study explores whether these non-financial factors may actually be stronger predictors of SoA delisting than traditional financial distress indicators, challenging conventional assumptions about why companies leave public markets.

Macroeconomic conditions – such as inflation, interest rates, gross domestic product (GDP) growth, exchange rates, unemployment and real economic activity – can significantly influence delisting decisions. High inflation increases operating costs and financial distress, raising delisting risk (Fedderke & Simkins 2012). Elevated interest rates burden leveraged firms by increasing borrowing costs (Del Negro et al. 2019). Positive GDP growth fosters investor confidence, while negative growth signals instability and increases the likelihood of delisting (Djerbi & Anis 2015).

Exchange rate volatility particularly affects firms engaged in international trade, exposing them to financial uncertainty and potential delisting (Choi et al. 2021). High unemployment reduces consumer spending and corporate revenues, increasing financial strain (Kola Benson et al. 2022). Real economic activity – such as electricity generation and distribution – is especially relevant in South Africa, where unstable supply can disrupt productivity and contribute to financial distress (Olajuyin & Mago 2022).

Macroeconomic factors also interact with financial metrics. Efficient cash flow management improves valuation, reduces capital costs and enhances profitability and liquidity (Wahyuni 2021). Growth and visibility attract investment, reinforcing financial health and reducing delisting risk (Putri 2021). Economic prosperity boosts consumer demand, while downturns reduce confidence and spending, impacting performance indicators such as ROA, return on equity (ROE), liquidity and FCF (Macey & O’Hara 2002).

Beyond financial metrics, macroeconomic conditions shape non-financial factors. Economic expansion encourages innovation and market entry, while downturns prompt cost-cutting and operational efficiency (Lansdell et al. 2025). Volatility in raw material prices and exchange rates can disrupt supply chains and affect stability (Kola Benson et al. 2022). These conditions also influence regulatory compliance and corporate reputation (Malik et al. 2014).

In South Africa, load-shedding – planned power outages to prevent grid failure – has become a critical macroeconomic concern, particularly during the period when this study was conducted. These disruptions halt production, raise operational costs and reduce revenues, particularly in manufacturing and mining sectors (Olajuyin & Mago 2022). Supply chain delays and resource diversion from strategic planning to survival further increase governance risks and the likelihood of delisting (Daily & Dalton 2017). Hence, monitoring electricity generation and distribution could offer insight into broader economic health and firm-level vulnerabilities (Kola Benson et al. 2022).

While macroeconomic conditions clearly affect corporate performance and market dynamics, their specific influence on strategic delisting decisions in emerging markets remains poorly understood. Most studies examining the macroeconomic determinants of delisting have focused on developed economies with relatively stable macroeconomic environments, making their findings potentially inapplicable to volatile emerging markets, such as South Africa. This study addresses this gap by investigating how macroeconomic variables – including inflation, interest rates, unemployment and country-specific factors like electricity supply instability – interact with firm-level characteristics to influence strategic exits through SoAs. Understanding these relationships is crucial for distinguishing between delistings driven by firm-specific challenges and those prompted by broader economic conditions beyond management’s control.

The literature reviewed reveals several consistent findings across developed markets. Financial determinants – particularly leverage, liquidity, profitability and market valuation – emerge as central predictors of delisting, with distressed firms exhibiting poor financial ratios and limited access to capital. Non-financial factors, particularly governance quality, board independence, institutional ownership and executive compensation structures, significantly influence the likelihood of delisting, with weak governance correlating with higher exit rates. Macroeconomic conditions, including interest rates, GDP growth, inflation and exchange rate volatility, shape the external environment within which delisting decisions occur, with economic downturns increasing exit pressures. Schemes of arrangement have been identified as a flexible restructuring mechanism used in both distress and strategic contexts, although its prevalence and motivations remain underexplored in emerging markets.

In summary, the existing literature has primarily examined delisting determinants in developed markets, with limited attention to emerging economies where institutional, regulatory and economic contexts differ substantially. Moreover, most studies have not distinguished between different delisting mechanisms, treating all exits as equivalent events. This study addresses these gaps by focusing specifically on SoA as a strategic delisting mechanism in South Africa, examining how financial, non-financial and macroeconomic factors interact to influence these decisions in a developing economy context characterised by volatility, governance challenges and unique regulatory dynamics.

The panel probit regression analysis identified 14 significant determinants that can predict the probability of delisting through SoA versus other methods (see Table 2). Several key statistics were considered to evaluate the model’s goodness of fit and overall statistical significance. The Pseudo-R² value of 0.61 indicates that the model can explain approximately 61% of the variability in the probability of delisting through SoAs (see Table 3). This moderate level of explanatory power underscores the model’s effectiveness in capturing the key determinants that influence delisting decisions because of an SoA. The Wald chi-squared statistic of 42.2, with a corresponding p-value of < 0.001, demonstrates the overall significance of the model.

The initial multivariate panel probit regression model highlights the multifaceted nature of delisting decisions. Fourteen variables were identified as statistically significant predictors, comprising eight financial, three non-financial and three macroeconomic factors. Among the financial variables, leverage and asset efficiency were positively associated with delisting risk, indicating that higher leverage and lower asset utilisation increase the probability of exit. Cash flow efficiency and financial health emerged as protective factors, with better management reducing the likelihood of delisting. Liquidity was also critical, reinforcing the importance of maintaining short-term solvency. Initial public offering underpricing was linked to long-term delisting risk, while financial size and stability suggested that larger, more resilient firms are less likely to delist. Strong market performance and positive investor expectations further reduced delisting probability. Non-financial determinants included the qualifications of the CEO and chairperson, which were negatively associated with delisting, highlighting the importance of competent leadership. Chief executive officer tenure also contributed to governance stability, reducing exit risk. Macroeconomic variables such as exchange rate volatility, real economic activity and capital market conditions were significant predictors. These findings underscore the influence of external economic pressures on corporate strategy and listing continuity. Overall, the model illustrates that delisting through SoAs is driven by a complex interplay of internal financial health, governance quality and macroeconomic conditions. Firms must proactively manage these dimensions to mitigate delisting risk and sustain their public market presence.

The final model, derived after sequential stepwise elimination of insignificant variables from the initial comprehensive multivariate panel probit regression, refines the predictors that significantly influence the probability of delisting through SoAs. The Pseudo-R² value of 0.68 indicates that the final model can explain approximately 68% of the variability in the probability of delisting through SoAs (see Table 4). The Wald chi-squared statistic of 218.82, with a corresponding p-value of < 0.001, demonstrates the overall significance of the model. The relatively high chi-squared and low p-value indicate that the model is statistically significant, meaning that the combination of the variables provides a robust explanation of the probability of delisting through SoAs.

The final panel probit regression model identified 11 significant determinants predicting the probability of delisting through SoAs versus other methods: debt structure and shareholder value, cost of capital efficiency, the market valuation component, underpricing on the IPO date, the market performance and expectation index, board dynamics and stability, diffused ownership, institutional influence, CEO qualification, repo rate and unemployment. These variables serve as indicators of potential delisting from the JSE through the SoA.

The configuration of a firm’s debt structure plays a critical role in its likelihood of delisting through an SoA. Indicators such as BVPS, TDPS and the ratio of long-term debt to total capital emerged as statistically significant predictors, with a p-value of < 0.001 and a negative coefficient of –0.16 (see Table 5). These results suggest that firms with more favourable debt metrics are less likely to delist, underscoring the importance of maintaining an optimal capital structure to enhance shareholder value and financial resilience. This finding aligns with existing literature, which emphasises that prudent debt management contributes to financial stability and reduces susceptibility to distress events that may trigger delisting (Hostak et al. 2013; Kang 2017). Specifically, lower TDPS and a reduced proportion of long-term debt relative to total capital are associated with improved adaptability to economic volatility and enhanced investor confidence (Mehran & Peristiani 2010). A sound debt structure also facilitates access to equity and capital under favourable terms, supporting strategic growth and long-term viability. These dynamics reinforce theoretical perspectives that highlight the role of capital structure in preserving market presence and mitigating voluntary exit through SoAs (Sallehuddin et al. 2019). The evidence thus supports the adoption of financial strategies that prioritise debt optimisation and shareholder value enhancement as safeguards against delisting risk (Thompson & Kim 2020).

Next, the cost of capital efficiency emerged as another significant factor influencing the likelihood of delisting. The analysis revealed a p-value of < 0.001 and a coefficient of –0.08, indicating a strong inverse relationship between capital efficiency and delisting probability (see Table 4). Firms that access capital at lower cost are better positioned to maintain operational continuity and avoid financial distress. This result is consistent with foundational financial theories, which argue that efficient capital structures contribute to long-term stability and reduce the need for restructuring mechanisms such as SoAs (Jensen & Meckling 1976; Modigliani & Miller 1958). Efficient equity raising enhances shareholder value and reinforces a firm’s market standing, further reducing delisting risk. The findings also highlight the strategic importance of financial agility and prudent fiscal management. Firms that maintain access to capital and manage financial obligations effectively are more resilient in the presence of economic uncertainty. Consequently, companies should adopt comprehensive financial strategies that prioritise cost-effective capital acquisition and robust governance to safeguard against delisting pressures and promote sustainable growth.

Market valuation emerged as a statistically significant factor influencing the likelihood of delisting through an SoA. With a p-value of 0.015 and a coefficient of –0.06, the analysis indicates that higher market valuation is associated with a reduced probability of delisting (see Table 5). This inverse relationship highlights the importance of investor perception and sustained growth in maintaining a firm’s public market presence. A strong market valuation typically reflects favourable performance indicators and growth potential, which bolster investor confidence and reduce the need for strategic exits (Makrominas & Yiannoulis 2021). Firms perceived as financially robust and well-positioned are less likely to encounter structural pressures that precipitate delisting. This supports the view that market valuation serves as a proxy for corporate health and future prospects (Ljungqvist et al. 2006).

Furthermore, companies with elevated valuations are better equipped to attract investment, pursue expansion and maintain financial resilience. These advantages reduce the necessity for capital restructuring through SoAs, which is often employed in response to financial instability or strategic misalignment (Nikani & Holland 2022). A favourable valuation also signals stability and growth to stakeholders, mitigating delisting risk (Donker et al. 2009). The findings, therefore, reinforce the strategic importance of valuation management. Firms that cultivate and sustain high market valuations are more likely to retain their listing status, underscoring the need for consistent financial performance and effective market positioning.

Initial public offering underpricing was also identified as a significant financial variable associated with delisting through an SoA. The analysis yielded a p-value of 0.012 and a coefficient of 0.043, indicating a positive relationship between first-day underpricing and the probability of delisting (see Table 5). While underpricing may attract initial investor interest and stimulate early market momentum (Intrisano et al. 2020), it can also introduce long-term vulnerabilities (Demers & Joost 2007). The positive coefficient suggests that underpricing, often driven by information asymmetry between insiders and public investors, may distort market expectations and lead to mispricing. This can undermine investor confidence and contribute to financial instability (Kashefi Pour 2015). Although underpricing may generate short-term enthusiasm, it may result in lower sustained valuations and increased susceptibility to delisting pressures. These findings underscore the intricate relationship between IPO strategy and long-term corporate performance. Firms that rely heavily on underpricing may find it challenging to maintain valuation levels and meet investor expectations, prompting restructuring through SoAs. Transparent and balanced IPO pricing strategies are therefore essential. Minimising information asymmetry and aligning initial pricing with intrinsic value are critical for fostering investor trust and ensuring long-term viability (Kashefi Pour 2015).

Market performance and investor expectations, measured through a composite index comprising cost of equity, actual returns and return differentials, were found to be significant financial determinants of delisting through SoAs. The analysis yielded a p-value of 0.002 and a coefficient of 0.17 (see Table 5), indicating that stronger market performance and elevated return expectations are associated with a reduced probability of delisting. The positive coefficient suggests that improvements in this index enhance corporate visibility and investor confidence, thereby mitigating delisting risk. This relationship highlights the importance of sustained market engagement and performance signalling. Firms that consistently deliver positive returns and meet or exceed investor expectations are more likely to be perceived as financially sound and strategically viable (Khan & Ali 2019; Nikani & Holland 2022). These perceptions foster investor trust and reduce the likelihood of strategic restructuring through SoAs. The findings are consistent with signalling theory, which posits that observable financial performance serves as a credible indicator of a firm’s underlying value and future prospects (Grullon, Larkin & Michaely 2018). Enhanced visibility through strong market performance attracts investor interest and reinforces a firm’s position in the public market. Companies that manage investor expectations effectively and maintain consistent returns are better positioned to avoid delisting pressures, underscoring the strategic importance of transparency and financial robustness.

Board dynamics and stability emerged as significant non-financial factors influencing delisting through SoAs. Variables such as board size, frequency of board changes and percentage turnover produced a p-value of 0.018 and a coefficient of 0.05 (see Table 5). The positive coefficient indicates that increased board turnover and larger board sizes are associated with a higher probability of delisting, emphasising the role of governance continuity in corporate sustainability. Frequent changes in board composition may signal internal instability and strategic misalignment, which can disrupt long-term planning and erode investor confidence (Sallehuddin et al. 2019). Such instability often reflects deeper governance challenges that may necessitate structural interventions, including SoAs. The market may interpret these disruptions as indicators of leadership uncertainty, thereby increasing perceived risk and delisting likelihood (Martinez & Serve 2017). While larger boards may offer diverse perspectives, they can also introduce inefficiencies and hinder responsiveness to market conditions (Bessler et al. 2012). The complexity of managing larger or frequently changing boards may exacerbate governance issues, prompting the need for restructuring to realign strategic direction (Daily & Dalton 2017). These findings underscore the importance of maintaining a stable and cohesive board structure. Effective governance, characterised by continuity and strategic alignment, is essential for sustaining investor trust and mitigating the risk of delisting. Firms that prioritise board stability are better equipped to navigate uncertainty and maintain their listing status.

Ownership diffusion emerged as a significant non-financial variable influencing delisting through SoAs. With a p-value of < 0.001 and a coefficient of –0.11 (see Table 5), the analysis reveals a strong inverse relationship: as ownership becomes more widely distributed among shareholders, the probability of delisting decreases. This finding highlights the governance benefits of dispersed ownership structures. A diffused ownership base limits the influence of dominant shareholders, promoting balanced decision-making and reducing the risk of strategic misalignment (Khan & Ali 2019). Broader shareholder participation enhances oversight and accountability, safeguarding against managerial opportunism and financial mismanagement (Croci & Giudice 2014). These dynamics contribute to corporate stability and reduce the need for restructuring through SoAs.

Institutional investor presence was also found to be a significant predictor of the likelihood of delisting. With a p-value of < 0.001 and a coefficient of –0.13, the analysis indicates that increased institutional ownership is associated with a lower probability of delisting (see Table 5). Institutional investors, because of their substantial equity stakes and professional expertise, play a critical role in monitoring management and influencing strategic decisions (Mehran & Peristiani 2010). Their involvement typically leads to stronger governance practices, disciplined planning and improved financial performance (Thomsen & Vinten 2014). Institutional participation also signals credibility, attracts additional investment and fosters transparency and regulatory compliance (Djerbi & Anis 2015). These factors collectively reduce the risk of delisting and support long-term market viability (Chaplinsky & Ramchand 2012).

Chief executive officer qualifications and board biographic data offer an innovative lens for understanding delisting risk. The analysis identified CEO qualification as a significant non-financial determinant, with a p-value of 0.009 and a coefficient of –0.15 (see Table 5). This suggests that higher levels of education and professional credentials are associated with a reduced likelihood of delisting through SoAs. Qualified CEOs bring strategic insight, industry expertise and leadership capacity that enhance governance and operational decision-making (Kashefi Pour 2015). Their ability to manage risk, respond to market dynamics and implement long-term strategies contributes to organisational resilience and investor confidence (Sallehuddin et al. 2019). The presence of well-qualified leadership signals credibility and strategic foresight, reducing the need for corrective restructuring (Hostak et al. 2013). These findings underscore the importance of executive competence in sustaining listing status. By investing in capable leadership and maintaining strong governance frameworks, firms can enhance strategic execution and reduce the exposure to delisting pressures.

Among the macroeconomic variables examined, the repo rate – used as a proxy for prevailing interest rates – was identified as a significant predictor of delisting through SoAs. With a p-value of < 0.001 and a coefficient of 0.025 (see Table 5), the analysis reveals a positive relationship: as interest rates rise, the probability of delisting increases. This finding underscores the influence of broader economic conditions on corporate stability and strategic decision-making. Higher interest rates elevate borrowing costs, placing pressure on firms’ financial resources and constraining investment capacity. These conditions can erode financial flexibility and increase the likelihood of distress, prompting companies to consider restructuring options such as SoAs (Bharath & Dittmar 2010). This dynamic complements earlier findings on capital efficiency, where elevated financing costs undermine operational sustainability. Theoretical foundations also support this relationship. Modigliani and Miller (1958) and Jensen and Meckling (1976) emphasise the importance of efficient capital access for corporate viability. Firms with weaker capital structures or limited funding alternatives are more vulnerable in high-interest environments, increasing their exposure to delisting risk. The findings, therefore, underscore the importance of proactive financial management in maintaining resilience amid shifting macroeconomic conditions.

The unemployment rate also emerged as a significant macroeconomic variable influencing the likelihood of delisting. With a p-value of 0.016 and a coefficient of 0.017 (see Table 5), the analysis suggests that higher unemployment is associated with a higher likelihood of delisting. This reflects the broader impact of labour market instability on corporate performance and investor sentiment. Elevated unemployment signals economic distress, suppressing consumer demand and weakening market conditions (Kola Benson et al. 2022). These pressures can reduce corporate revenues and profitability, increasing the risk of financial instability and strategic restructuring (Liao 2020). The relationship complements findings on market valuation and financial resilience, where adverse macroeconomic conditions undermine investor confidence. Companies operating in high-unemployment environments must adopt adaptive strategies to preserve financial health and mitigate delisting risk. These findings reinforce the importance of macroeconomic awareness in strategic planning and corporate sustainability.