Following the initiation of the demutualization process by the Nigerian Stock Exchange (NSE), the members and owners of the Exchange, Tuesday in Lagos, passed requisite resolutions for the demutualisation of The Exchange at a Court-Ordered Meeting (COM) and an Extraordinary General Meeting (EGM).
Demutualisation is a change of corporate form from being a company that is limited by guaranty to a company that is limited by shares. In other words, it is a change from private ownership to a publicly quoted entity which interested members of the public can buy into and own shares.
At the court-ordered meeting in Lagos, members voted and assented to the re-registration of the Exchange as Nigerian Exchange Group Plc. They also agreed to the transfer of its securities exchange licence and other assets required carrying out the securities function to Nigerian Exchange Limited.
With this development, the NSE would now re-register as a profit-making entity owned by shareholders called the Nigerian Exchange Group Plc with a share capital of N1.25 billion, from being a not-for-profit entity.
NSE current chief executive officer (CEO), Oscar Onyema, was nominated and elected as the CEO and Managing Director of the Nigerian Exchange Limited, a unit of the Holding company going to emerge from the demutualized exchange.
Moreover, they agreed to the establishment of a separate subsidiary company to be charged with the regulatory functions of The Exchange post-demutualisation to be called NGX Regulation Limited.
Furthermore, the members agreed to that the total share capital being N1,250,000,000 comprising 2,500,000,000 ordinary shares of 50 kobo each to be registered with the Corporate Affairs Commission (CAC).
In addition, they agreed to the allotment of 1,964,115,918 ordinary shares to Dealing Members and Ordinary Members on the basis of a ratio of 78:22, respectively.
Finally, the members agreed to the provision of Claims Review Shares totalling 40,083,999 (Forty Million, Eighty-Three Thousand, Nine Hundred and Ninety-Nine) ordinary shares, representing two per cent of the Issued Shares of Nigerian Exchange Group, to be set aside for allotment to parties who are adjudged as being entitled to shares in the demutualised Exchange.
Accordingly, it was agreed that the assets of existing subsidiaries of The NSE including NSE Consult Limited, NSE Nominees Limited and Coral Properties Limited will be transferred to the Nigerian Exchange Group Plc.
Following the court-ordered meeting, members reconvened for an emergency general meeting (EGM) for determination of members of the Board of Directors of the demutualised Exchange, and the implementation of an Employee Share Ownership Plan (ESOP).
Consequently, the following Directors were nominated and appointed to the board including Otunba Abimbola Ogunbanjo as Chairman and Non-Executive Director, Oscar Onyema as Chief Executive Officer and Managing Director, and Dr Umaru Kwairanga as Member and Non-Executive Director.
In addition to these, four other people were elected as members and non-executive directors while five people were elected as members and independent non-executive directors.
Speaking at the meeting, President of the National Council of NSE, Otunba Abimbola Ogunbanjo, said, “I feel elated that 19 years after initiating the process to demutualize and on the 60th anniversary of the Exchange, we are close to achieving the goal.
“The successful demutualization of the Exchange was one of my main objectives when I assumed the Presidency of the Exchange and I am particularly happy it has been achieved during the lifetime of one of its founding fathers, Pa Akintola Williams.
“In telling the story of how we have achieved this milestone, we recognize the efforts of several actors involved in this project, including the management and staff of The Exchange, our members, professional advisers, the Federal Government of Nigeria, the Securities and Exchange Commission (SEC) and other capital market stakeholders, without whom it could not have become a reality.”
Commenting on the successful outcomes at the meetings, Onyema, said, “Today’s meetings move the demutualization process significantly forward and the positive outcomes affirm the great interest from members to support the pivotal restructuring of the exchange to become globally competitive.
“In furtherance of our plans, we will move to file the necessary resolutions from the meeting and all other required documents at the CAC and SEC, obtain the Court Order sanctioning of the Scheme, complete all necessary registrations and seek the final approval from the SEC to ultimately demutualise”, he said.