Demutualisation scheme of the the Nigerian Stock Exchange has been approved by its members at the Extra-Ordinary General Meeting (EGM) of its members.
The NSE said in a statement that members of the Exchange authorised the National Council and Management of the Exchange to proceed with the process leading up to the demutualisation of the Exchange subject to applicable laws and regulations and obtaining the approvals of members and the relevant regulatory authorities.
They also ratified the engagement of financial advisers, legal advisers, tax advisers and any other adviser that may be required for the demutualisation of the Exchange.
Speaking after the successful meeting, the President of National Council, NSE, Mr. Aigboje Aig-Imoukhuede, CON noted that “the approval of the NSE demutualisation plan marks the achievement of an important milestone towards completion of the exercise. The demutualization of the Exchange will bring the Nigerian capital market on a par with other international jurisdictions, result in enhanced governance, transparency and visibility whilst attracting strategic partners, investors and good quality issuers. These are historic times indeed”.
Also commenting on development, the Chief Executive Officer, NSE, Oscar N. Onyema, OON, noted that “the approval of the demutualisation process will generate substantial motivation for the development of 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 capitalize 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”.
Demutualisation is the process through which any member owned organisation becomes a shareholder-owned company. Basically, it refers to the conversion of a non-profit, mutually owned company to a for-profit entity limited by shares. Demutualisation segregates ownership and management from the trading rights of the members of an exchange.
The demutualisation process was handled by Chapel Hill Denham, a financial advisory company in Lagos, Nigeria. The NSE is expected to float itself on the exchange anytime.