Demutualisation: Stockbroking Firms To Own 78% Of Nigerian Exchange Group Plc


Members of the Nigerian Stock Exchange, will on March 3, 2020, hold a court-ordered meeting in Lagos, where they are expected to consider and possibly approve an allotment of shares in the post-demutualized Nigerian Exchange Group Plc on the basis of the split ownership of 78:22 ratio between the dealing and ordinary members and on an equal basis within each bloc.
Consequently, according to the notice published on Tuesday, a total of 1,964,115,918 ordinary shares in the demutualized and re-registered Nigerian Exchange Group Plc will be allotted to each dealing member firm (stockbroking firms).
If approved by the meeting, each stockbroking firm will be allotted 6,007,884 ordinary shares of the NEG Plc credited as fully paid, while each ordinary member will get 2,441,274 units credited as fully paid.
The Nigerian Exchange Group Plc will retain all assets, liabilities, and undertakings, including real and intellectual property rights of the Exchange, with the exception of the Securities and Exchange Commission licence and all assets and everything relating to the securities trading business of the NSE.
The SEC licence will, however, go to a newly established Nigerian Exchange Limited; while the regulatory functions of the pre-demutualized NSE, along with all assets existing contracts required to carry out the regulatory functions be transferred to NGX Regulations Limited, pursuant to the regulatory services agreement.
According to the notice, these will come after a vote at the court-ordered meeting to convert the exchange from a company limited by guarantee to one limited by shares and re-registered as a public company in the name Nigerian Exchange Group Plc.
Also, the meeting will vote for an amendment to the Memorandum and Articles of Association of the re-registered exchange “to state the new name- Nigerian Exchange Group Plc; the share capital, and reflect all the requisite provisions required of a public company limited by shares.”
Consequently, the re-registered company will have an authorized share capital of N1.25bn split into 2.5bn ordinary shares of 50 kobo each registered with the Corporate Affairs Commission.
It is also proposed that a total of 40.083m ordinary shares, representing 2% of the issued shares of the NEG, be set aside as claims review shares for allotment to parties who are adjudged as being entitled to shares in the demutualized exchange, pursuant to the provision of the Demutualisation Act 2018.
Should these shares be insufficient to satisfy claims successfully heard either by the board of the demutualized exchange, or a claims review panel, the board is seeking approval to allot or issue additional number of shares from the authorized shares as may be required to settle any outstanding claims within the period set out in the Demutualisation Act, 2018.
In line with the Demutualisation Act, 2018, any balance of the Claims Review Shares is to be distributed pro-rata among the shareholders of the Exchange as at the date of demutualization.