RMB advises on the demutualisation and listing of the NGX Group on the Nigerian Exchange

Client challenge

The NGX Group services the largest economy in Africa. Founded in 1960, it was owned by its members and run as a not-for-profit entity. But as the NSE evolved, it recognised the need to reorganise its corporate and ownership structure into one limited by shares and owned by shareholders. This change was essential to unlock growth and expansion opportunities and was achieved through a process of demutualisation. The listing of the resultant NGX Group Plc on the Nigerian Exchange required securing the consent and approval of multiple stakeholders.

RMB's solution

Our Corporate Finance Advisory team guided the evaluation and selection of the most efficient transaction structure for the execution of the demutualisation process and eventual listing of the NGX Group. RMB Stockbrokers also acted as co-sponsoring stockbroker and managed the listing process end-to-end to ensure a seamless termination of its trading on the NASD OTC and transitioning to the main board of the NGX.

The team offered strategic independent advice to ensure that there will be greater accountability and governance in the management of the bourse with the timely publishing of all interim and final financial results in compliance with the post-listing obligations. They further ensured that all stakeholders’ interests is protected and that they would have easy access to capital for investment in trading technology enhancement and new product development.

There is now a separation of trading right from ownership of the exchange, as trading license holders can now sell their NGX Group shares and still retain their trading right as a dealing firm on the NGX Exchange.

Client benefits

The listing of the NGX Group following the successful demutualisation is a landmark transaction for Nigerian capital markets and the economy, with the NSE (now the NGX Group) taking a position as a primary enabler of growth capital for the economy. The key benefits of the demutualisation include access to broader capital pools (beyond the NSE’s membership base); the provision of an alternative currency for inorganic expansion strategies; the enablement of the Exchange’s capacity for growth and scale; and the potential to compete on a global level.