One year after obtaining shareholders’ nod unanimously to migrate from a members owned to a publicly traded bourse at its at a court-ordered meeting, the Nigerian Stock Exchange (NSE), on Wednesday said it has received final approvals of its demutualisation plan from the Securities and Exchange Commission (SEC) and Corporate Affairs Commission (CAC) respectively.
With this, the exchange said it is set to activate its Transition Plan to a new operational structure and holding company, taking the Group and its subsidiaries through to full Operational Launch.
This, it noted in a statement will entail legal and practical changes to enable the functioning of the new corporate structure, with no loss of service and a seamless transition for market participants.
Specifically, the NSE is expected to inaugurate “Boards for each of the new entities, staff reallocation to their respective functions within the operating subsidiaries, operationalisation of business plans and budgets, technology systems transfer, and the requisite arm’s length agreements between the entities.”
The Operational Launch is expected to come with the Group’s new brands, including unveiling of a new website, which will put the group in a position to execute on its strategic vision, just as stakeholders, including shareholders, will benefit from he enhanced Corporate Governance framework, access to capital to fund strategic developments, and a more globally competitive Exchange.
The approvals also enable the shares of NGX Group Plc, which have been registered with the SEC, to be allotted to the members, pursuant to the Court-approved Scheme of Arrangement. Ahead of its listing on NGX Limited, the shares of NGX Group Plc will be available for bilateral trades to be executed in line with extant rules and regulations of the Nigerian capital market.
Otunba Ogunbanjo will serve as the inaugural Chairman of NGX Group Plc’s Board of Directors.
With th demutualisation process completed, the re-registered company will have an authorized share capital of N1.25bn, divided into 2.5bn ordinary shares of 50 kobo each registered with the Corporate Affairs Commission.
Consequently a total of 1,964,115,918 ordinary shares in the demutualised and re-registered will be allotted to the existing 255 dealing members (stockbroking firms). The allotment is on the basis of ratio 78:22 between the dealing and ordinary members and on an equal basis within each bloc. While each of 255 stockbroking firm will receive 6,007,884 ordinary shares credited as fully paid; an ordinary member will get 2,441,274 units also credited as fully paid.
A total of 40.083m ordinary shares, representing 2% of the issued shares of the NEG, will be set aside as claims review shares for allotment to parties who are adjudged as being entitled to shares in the demutualised exchange, pursuant to the provision of 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.
Under the demutualisation plan, a new non-operating holding company, the Nigerian Exchange Group Plc (NGX Group) has been created and will have three operating subsidiaries, namely. They are Nigerian Exchange Limited (NGX Limited), the operating exchange; NGX Regulation Limited (NGX REGCO), the independent regulation company; and NGX Real Estate Limited (NGX RELCO), the real estate company; all of which have been registered at the CAC.
Commenting, Otunba Abimbola Ogunbanjo, NSE Council President, said the success of the demutualisation was one of his fundamental objectives on assuming the Presidency of The Exchange.
According to him, “the SEC’s decision today to approve the NSE’s demutualisation plans brings this aspiration to a successful conclusion in a process that included the passage of the Demutualisation Act through the National Assembly.
“We are elated that this milestone has been achieved as we celebrate the 60th anniversary of the commencement of trading at the Exchange and now look forward to the future public listing of its shares on NGX Limited. On behalf of the NSE, I would like to warmly thank all those that have worked assiduously to achieve this watershed event on our journey to make the NSE a multifaceted exchange that extends across various markets and geographical regions.”
The statement quoted Oscar Onyema, the new Group CEO of NGX Group Plc, as saying: “The Nigerian capital markets should play a role commensurate with Nigeria’s status as Africa’s largest economy. At the Nigerian Stock Exchange, we have a vision that the new group will become the premier exchange hub for Nigerian businesses and for the African economy. We are implementing a series of measures towards this goal, demutualisation being a critical milestone. The completion of demutualisation is a truly significant moment, and we welcome the new possibilities that have opened up for us today.”
Demutualisation of the NSE, the statement stressed, is pivotal in that it creates new strategic opportunities that will enable the Group realise its vision of becoming Africa’s leading capital market infrastructure provider. The creation of a holding company and a new capital structure will also enable NGX Group Plc to form new dynamic relationships, drive strategic partnerships and gain capital-raising flexibility. It will be recalled that NSE members approved at its last AGM, the listing by introduction of NGX Group Plc on NGX Limited.
