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NGX Group eyes N32.62bn from listing 1.9bn shares

…at indicative price of N17.17 per share

The Nigerian Exchange Group (NGX Group) is targeting a capital raise of N32.62 billion from a listing by introduction of 1,964,115,918 ordinary shares of 50 Kobo each on a date to be announced next week.

With the approval on September 22, the Nigerian Exchange Group Plc will be listing the shares on the Nigerian Exchange Limited (NGX) at an indicative price of N17.17 per share. This will translate to an issued share capital of about N32.62 billion.

The indicative price of N17.17 is at a significant premium of N3.62 or 21 percent compared to N13.55 it exchanged on Monday, October 4 on the NASD Plc’s over-the-counter (OTC) trading platform. The shares sold even lower on Thursday, September 30 at N13.17.

This listing by way of introduction means that NGX Group is not looking to issue new shares nor seeking to relinquish some of the existing shares of its majority shareholder to raise equity capital in the immediate term, but existing shareholders will now be provided with the opportunity to sell to the public leveraging the platform of the Nigerian Exchange Limited.

At the OTC platform, NGX Group’s last traded stocks were 20,211,004 units. The price had reached a 52-week high of N30.26 and a corresponding 52-week low of N12.98.

Since the shares were admitted for trade on the NASD Plc, the Nigerian Exchange Group Plc trades with a Symbol “SDNGXGROUP”.

At the start of demutualisation, NGX Group had just 432 shareholders, a number that has doubled since the OTC trading commenced.

Following the demutualisation of then Nigerian Stock Exchange (NSE) earlier this year, a new non-operating holding company known as The Nigerian Exchange Group Plc (NGX Group) was formed.

NGX Group has three operating subsidiaries, namely: Nigerian Exchange Limited (NGX Limited), NGX Regulation Limited (NGX REGCO), and NGX Real Estate Limited (NGX RELCO) which are duly registered by the Corporate Affairs Commission (CAC).

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The stockbrokers to the listing of the Nigerian Exchange Group Plc are Chapel Hill Denham Securities Limited, and RMB Nigeria Stockbrokers Limited, while the Issuing House(s)/financial adviser(s) are Chapel Hill Denham Advisory Limited, and Rand Merchant Bank Nigeria Limited.

With the successful completion of demutualisation, the Exchange transited from a member-owned company to a company owned by shareholders, bringing to an end the leadership of the national council.

In this new era, Abimbola Ogunbanjo took on the office of the group chairman of Nigerian Exchange Group, while Abubakar Mahmoud assumed office as the chairman of Nigerian Exchange; Catherine Echeozo as the chairman of NGX Regulation Limited, and Erelu Angela Adebayo as the chairman of NGX Real Estate Limited.

All other members of the dissolved national council are serving in various capacities on the boards of the new entities.

As the NGX Group progresses its plans to list on Nigerian Exchange Limited, it looks forward to welcoming a broader group of investors to share in its journey.

Ahead of this listing, the Nigerian Exchange Group in July 2021 had engaged analysts where the management of the group and its entities provided key insights into the setup of the new structure, current operations and plans.

“This shows strong prospects for the new types of investors NGX Group can attract once it lists by introduction on NGX”, Oscar N. Onyema, group managing director/chief executive officer, NGX Group Plc said.

Though, total operating income of N6.018 billion as against N7.782 billion in 2019 implies a decrease by 22.67 percent.

Nigerian Exchange Group reported operating surplus after tax of N1.83 billion in 2020, from N2.25 billion in 2019, which represents a decrease of 18.56 percent, according to its audited financial statements for the period ended December 31, 2020.

Onyema said the 2020 results reflect the challenging macroeconomic and market conditions, “as well as operational resilience of the Group with income and resulting surplus after tax valued at N6.02billion and N1.84 billion respectively.”

The financial scorecard, which is the NGX group’s first publicly circulated financial report after demutualisation, shows its revenue printed lower by 23.92 percent in the review year to N3.76 billion from N4.954 billion in 2019.

Operating Surplus before tax at N1.909 billion in 2020 represents 17 percent decrease from N2.3 billion in 2019.

A further look at the NGX Group results shows that share of profit of equity accounted investees rose to N2.003 billion from N1.531 billion in 2019, representing an increase of 30.83 percent.

At the 60th annual general meeting of Nigerian Exchange Group Plc (formerly Nigerian Stock Exchange) held at Transcorp Hilton Hotel, Abuja, on Thursday September 9, 2021 the shareholders considered and approved among others – further to members’ approval at the extra-ordinary general meeting of March 3, 2020 for the establishment of an Employee Share Ownership Plan for the benefit of qualifying employees of Nigerian Exchange Group Plc and its subsidiaries –that the company issues and allots 200,419,990 ordinary shares of 50 kobo each out of the authorised share capital of Nigerian Exchange Group Plc for the operation of a long term incentive plan consisting of a Deferred Bonus Plan (DBP) and an Employee Share Purchase Plan (ESPP), with effect from January 1, 2021, subject to obtaining requisite regulatory approvals.

The shareholders also approved for the board of directors to establish and operate a Deferred Bonus Plan for the benefit of qualifying members of the senior and executive management of Nigerian Exchange Group Plc and its subsidiaries and an Employee Share Purchase Plan open to all employees of Nigerian Exchange Group Plc and its subsidiaries.

The Group told shareholders that a total of 100,209,995 units of ordinary shares would be allocated for the deferrals over the cycles in which the allocated shares can cover.

The NGX Group said the DBP is expected to help the Group better retain key talent and high performers to deliver on strategic imperatives.

A total of 100,209,995 units of ordinary shares would form the pool to be offered under the ESPP for purchase by the employees of Nigerian Exchange Group Plc and its subsidiaries, at a discount of between 15 percent – 20 percent of the market share price, subject to the fixed cap per employee and availability of the pool.

“Staying firmly afloat during the stormy financial year, the Group recorded an operating surplus of N1.84 billion for the year, which represented a decline of 18.56 percent from 2019. Our listing fees income reflected the headwinds dealt by the COVID-19 pandemic, declining by 62.66 percent from the previous year driven by the uncertainty of prospective issuers in the wake of the pandemic.

Following management’s cost containment efforts, total expenses declined by 12.86 percent year-on-year without affecting The Exchange’s high operating standards and service delivery.

Conversely, our net assets grew by 10.03 percent to N31.28 billion providing us with greater financial flexibility to execute on our strategic agenda and respond to changes in our operating environment”, said Abimbola Ogunbanjo, NGX Group chairman.

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