The Nigerian Stock Exchange (NSE) proposed demutualization has finally entered full gears, the scheme of arrangement seen by BusinessDay shows.
The National Council of the Exchange unanimously proposed and approved a share allocation of 78percent and 22percent respectively as between Dealing and Ordinary Members based on the Distribution Rationale.
The Financial Advisers are Chapel Hill Denham Advisory Limited and Rand Merchant Bank Nigeria Limited.
The NSE currently has 432 members – Dealing Members (255) and Ordinary Members (177).
On demutualization, the Exchange will be converted from a company limited by guarantee to a company limited by shares, consequent upon which The Exchange will be registered, under the name Nigerian Exchange Group Plc. The Memorandum and Articles of Association of the re-registered Exchange shall also be amended to indicate the new name, Nigerian Exchange Group Plc.
The said share allocation follows extensive consultations with respective stakeholder groups and the careful consideration of the contributions of members to the development of The Nigerian Stock Exchange.
Prior to the allotment of the Scheme Shares, 2percent of the issued share capital will be reserved for purposes of allotment to parties who are adjudged as being entitled to shares in the demutualised Exchange, pursuant to the provisions of the Demutualisation Act 2018.
In addition to other steps that will come earlier, the NSE will on March 26, 2020 register Plc (HoldCo) shares with SEC while on March 30, 2020, it will allot HoldCo shares and file allotment registration at CAC.
A total of 1.964 billion ordinary shares – representing circa 98percent of the Issued Shares of the Nigerian Stock Exchange and the balance of the Issued Shares following the reservation of the Claims Review Shares – will be apportioned between Dealing and Ordinary Members.
Accordingly, each Dealing Member shall receive 6.007million ordinary shares of 50 kobo each in Nigerian Exchange Group Plc credited as fully paid; and each Ordinary Member shall receive 2.441 million ordinary shares of 50 kobo each in Nigerian Exchange Group Plc credited as fully paid. The Exchange reported a net asset value of N25.6 billion as at December 30, 2018; and this has been factored into the valuation that has been undertaken.
Upon demutualisation, The Nigerian Stock Exchange will be renamed Nigerian Exchange Group Plc pursuant to the Scheme. Nigerian Exchange Group Plc will be a Public limited company retaining incorporation date of September 15, 1960 and registration certificate number RC 2321 registered under the laws of the Federal Republic of Nigeria.
Upon re-registration, Nigerian Exchange Group Plc will become a non-operating holding company; with interests in Nigerian Exchange Limited and all the other subsidiaries presently owned by The NSE.
On Transfer of Assets and Winding Up, all the assets, liabilities and undertakings including real property and intellectual property rights of The Exchange – with the exception of the securities exchange licence and all assets and appurtenances in relation to the securities trading business of The NSE – shall be retained by Nigerian Exchange Group Plc.
NSE Consult Limited, NSE Nominees Limited and Coral Properties Limited – existing subsidiaries of The NSE – will be subsequently voluntarily wound up and the assets of NSE Consult will be transferred to Nigerian Exchange Group Plc pursuant to section 457 of the Companies and Allied Matters Act, 2004.
The Exchange has a 99.8percent holding in NSE Consult Limited. The Exchange has a 99.9percent holding in Coral Properties Limited. The Exchange has a 99.9percent holding in NGX Real Estate Limited. Also, the Nigerian Stock Exchange has a 83.3percent holding in NSE Nominees Limited.
Upon demutualisation, The Nigerian Stock Exchange will become the 57th exchange to demutualise amongst the 70 members of the World Federation of Exchanges as at June 27, 2019; with benefits and opportunities becoming available to Members and other stakeholders of The Exchange, according to Abimbola Ogunbanjo, President, National Council of The Nigerian Stock Exchange.
He said, “The National Council considers the terms of the Scheme to be fair and the optimal approach to achieving the demutualisation of our Exchange”.