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Listing of MTN Nigeria on May 17, 2019.

The Nigerian Stock Exchange (NSE) has finally completed its demutualization process, following statutory approval from the Securities and Exchange Commission (SEC) and Corporate Affairs Commission (CAC) respectively.

 

This is according to a disclosure made available on the website of the Nigerian Stock Exchange and seen by Nairametrics.

 

Recall that members of the NSE had in March 2020, passed requisite resolutions for the demutualization of the Exchange at a Court-Ordered meeting and an Extraordinary General Meeting. As part of the demutualization process, The Exchange (which is a company limited by guarantee) would be converted into and re-registered as a public company limited by shares, with three operating subsidiaries.

 

In lieu of this, a new non-operating holding company known as The Nigerian Exchange Group Plc (‘NGX Group’) was formed. It has three operating subsidiaries, namely: Nigerian Exchange Limited (NGX Limited), NGX Regulation Limited (NGX REGCO), and NGX Real Estate Limited (NGX RELCO) which have been duly registered at the CAC.

 

 

What this means

The recent regulatory approval from SEC and CAC empowers the NSE to activate its Transition Plan to a new operational structure and holding company. The plan covers legal and practical changes that will facilitate the operationalization of the new corporation structure. The goal here is to enable a seamless transition of the Group and market participants without a disruption in service.

 

With the activation of ‘The Transition Plan’, a new Board for each of the new entities will be inaugurated, staff functions will be reallocated within the new operating subsidiaries, a new business plan and budget will be operationalized, a new website will be unveiled, among others.

 

In addition, the recent regulatory approval will enable the shares of the new Group (NGX Group Plc) to be allotted to the membership 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.

 

What they are saying

Commenting on the recent development, NSE Council President, Otunba Abimbola Ogunbanjo said: “Successful demutualization was one of my fundamental objectives when I assumed the Presidency of The Exchange.  The SEC’s decision today to approve the NSE’s demutualization plans brings this aspiration to a successful conclusion in a process that included the passage of the Demutualization 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.”

 

On the other hand, the new Group CEO of NGX Group Plc, Oscar N. 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, demutualization being a critical milestone. The completion of demutualization is a truly significant moment, and we welcome the new possibilities that have opened up for us today.”

 
What you should know

  • The NSE had earlier announced the inauguration of a 5-man claims review panel in preparation for the demutualization process.
  • Nairametrics had earlier reported the appointment of Oscar Onyema, Temi Popoola and Tinuade Awe as CEOs of NGX Group, NGX Limited and NGX REGCO respectively.
  • It is also worthy to note that Mr. Otunba Ogunbanjo will serve as the inaugural Chairman of NGX Group Plc’s Board of Directors.

 

Nairametrics