The Nigerian Stock Exchange (NSE) is going to be publicly listed with an authorized share capital of 1.25 billion, consisting of 2.5 billion ordinary shares at 50k per share, as the NSE’s dealing and ordinary members have unanimously voted for the bourse to transform from a member-owned exchange to a publicly-quoted company
The historic event, which took place following a court-ordered extra ordinary general meeting of all the dealing and ordinary members of the Exchange, at the Civic Centre Victoria Island, Lagos, had the NSE change its name to Nigerian Exchange Group Plc, which is a holding company thereby separating its regulatory functions from its other business activities.
Meanwhile, the Nigerian Exchange Group Plc (NEXG) having satisfied all requirements of being a public quoted company according to the scheme document for the demutualization would have 1, 964,115,918 number of shares allotted and deemed to be fully paid in a split ownership of 78% to 22% between dealing and ordinary members of the Exchange. Prior to the determination of the ownership structure of the Exchange, 2% of its authorized share capital was set aside to settle outstanding claims arising from the demutualization.
All assets, liabilities, and undertakings, including real property in relation to the trading business of the Exchange, are to be retained by NEXG. The securities exchange license of NSE, along with all assets and existing contracts required to carry out securities and exchange functions would be transferred to NEXG. The regulatory function of the NSE along with all assets and existing contracts that will be required to carry out regulatory function would also be transferred to NEXG.
However, Mr Oscar Onyema OON, the CEO of the new NEXG, disclosed that the group would move from having a council to having a board of directors with about 5 to 6 independent directors coming on board. He added that the new structure and offerings of the group should encourage big corporates to list on the exchange.
“With the separation of the regulatory activities from the business activities, we would begin to see a different type of organization, an organization that is really driven for profit, hitting on all cylinders.
“While the regulatory company will provide all the regulation that needs to happen to ensure that we are running according to global best practices which should be attractive to large corporates that are looking for a well ran exchange to list their companies,” Onyema said.
Also speaking at the event just before the constitution of the board of the NEXG, Otunba Abimbola Ogunbanjo chairman of the board, disclosed that as a result of the demutualization, the first transformation which will be noticed is the decoupling of membership and ownership rights adding that NEXG will run with a board of 12 people.
Speaking about the benefits of demutualization, he said, “So when you operate as a profit entity the first thing that you are going to see is enhanced performance, competition, deepening of the market, foreign investors looking at the Nigerian Stock Exchange to invest, flexibility in the products and much more.
“We will be operating as a public entity now a for-profit entity so the first transformation that is going to happen will be the decoupling of the membership rights and ownership rights. Prior to this demutualization, you had only the dealing members and the ordinary members, now that is going to be different,” Ogunbanjo said.
However, according to Otunba Ogunbanjo, the report and result of the court-ordered meeting are to be filed with the Securities and Exchange Commission (SEC) in order to obtain the final copy of the scheme, thereafter, the necessary petition will be made to the Federal High Court to sanction the scheme. Once sanctioned by the court and registration done with the Corporate Affairs Commission, demutualization be effective.