NSE’s Demutualisation Progresses as Members Meet on Share Allotment, Board

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Goddy Egene

The demutualisation process of the Nigerian Stock Exchange (NSE) is nearing its peak as the members of the exchange will meet on March 3, to approve a change in the name of the exchange and allotment of shares in accordance with the scheme of arrangement.

At the court-ordered general meeting, members of the NSE will approve the conversion of the exchange from a company limited by guarantee to a company limited by shares and it will be re-registered in the name of Nigerian Stock Exchange Group Plc.

The company will have authorised share capital of N1.250 billion dividend into 2.5 billion ordinary shares of 50 kobo each. The will also approve the shares allotment ratio of 78:22 for dealing members and ordinary members respectively.

The members will similarly approve the transfer of the regulatory functions of the exchange to a new entity to be known as NGX Regulation Limited.

Apart from the court-ordered general meeting the an extra-ordinary general meeting (EGM) would be held on the same in Lagos to elect board members for the company among others resolutions to the considered and passed.

The Chief Executive Officer of NSE, Mr. Oscar Onyema had last month said plans to demutualise the exchange were on top gear, following the receipt of ‘No Objection’ approval letter from the Securities and Exchange Commission (SEC) last month December.

“Now that we have seen the ‘No objection’ letter from the SEC in December, we are now putting in place final touches to have the court ordered meeting and the EGM. There will be significant engagement with investors, press and our primary constituency, the brokers and other members of the exchange and the general public. So there is a very robust plan already in place. We are working as quickly as we can to complete it and we hope that very soon, we will put out the notices for the EGM,” he said.

According to him, the demutualization of the NSE will bring the Nigerian capital market at a par with other international jurisdictions, result in enhanced governance, transparency and visibility whilst attracting strategic partners, investors and good quality issuers.

“The demutualisation will lead to an agile exchange thereby consolidating its innovativeness and strengthening its leadership both at local and international levels whilst also adding value to its stakeholders. As a demutualized entity that is profit-seeking, the NSE will be in a better stead to capitalise on new income opportunities, free from any limitations arising from conflicting member interests and existing laws and more importantly be able to better support the economic growth of Nigeria,” Onyema said.