The Nigerian Stock Exchange (NSE) has secured the final approvals of the Securities and Exchange Commission (SEC) and Corporate Affairs Commission (CAC) for its demutualisation plan, thereby concluding the Plan’s processes which commenced about two years ago.
With the approved demutualisation plan, the NSE has now transformed to a new non-operating holding company, the Nigerian Exchange Group Plc (‘NGX Group’).
The Group will be operating through three CAC duly registered subsidiaries, namely the 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.
Commenting on the approvals, the NSE Council President, Otunba Abimbola Ogunbanjo, who will serve as the inaugural Chairman of NGX Group Plc’s Board of Directors said: “Successful demutualisation was one of my fundamental objectives when I assumed the Presidency of The Exchange.
“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 investment chief added.
With the approvals by the SEC and CAC, the bourse can now activate its Transition Plan to a new operational structure and holding company.
The implementation of the Transition Plan, which will take the NGX Group and its subsidiaries through to full Operational Launch, covers 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.
It will also see the inauguration of Boards for each of the new entities, staff re-allocation to their respective functions within the operating subsidiaries, operationalization of business plans and budgets, technology systems transfer, and the requisite arm’s length agreements between the entities.
With the Operational Launch, the Group’s new brands, including a new website, will be unveiled and the NGX Group will be properly positioned to execute on its strategic vision. Stakeholders, including its new shareholders will benefit from the Group’s 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 membership pursuant to the Court approved Scheme of Arrangement.
Prior the listing of 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.
In his remarks, the new Group CEO of NGX Group Plc Oscar Onyema, said: “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”, Onyema added.
Capital market analysts believe that the demutualisation of the NSE is desirable to deepening the Nigerian capital market in view of its potential to create new strategic investment opportunities that will enable the NGX Group realise its vision of becoming Africa’s leading capital market infrastructure provider.
It would be recalled that NSE members approved at its last AGM, the listing by introduction of NGX Group Plc on NGX Limited.