The VFD Group Plc has described its acquisition of the single largest equity stake in Nigerian Exchange Group (NGX Group) as a strategic decision to be a key player in the securities exchange business.
The Nation had reported exclusively that VFD Group Plc, an indigenous investment group, had acquired the largest equity stake of 5.17 per cent in NGX Group, the holding company for Nigeria’s main securities exchange, Nigerian Exchange (NGX) Limited and the leading clearing house, Central Securities and Clearing System (CSCS) Plc.
Managing Director, VFD Group Plc, Mr Nonso Okpala, said the acquisition was in alignment with the investment group’s strategic vision of building Africa’s first diverse business ecosystem.
According to him, the investment in the pioneer exchange company of Nigeria was a strategic play in the group’s ecosystem build, an investment philosophy that ensures the group drives global prosperity by investing in businesses that have potential, helping them maximise their potential and supporting the platform that can help portray them to the world.
He said the investment in the NGX Group as the exchange company of choice was due to the wide range of services offered and how the NGX has been positioned for growth.
He noted that the NGX Group is a leading integrated market infrastructure in Africa, that services the largest economy in Africa and is strengthening the competitiveness of African economies to achieve global prosperity.
He added that as a key player in the continent’s financial markets, NGX plays an active role in shaping the future of the markets through its investment in business innovation and technology.
“Our interest in the NGX is borne out of our desire to be a key player within the exchange business in Nigeria, contribute to the deepening of the capital market and be a catalyst for capital formation within the economy.
“With over a decade of operations, VFD Group has carved a niche for itself with over N50 billion in equities invested in over40 businesses without bias for sector or geography and we believe that our stake in the NGX will improve investor confidence in our country, drive capital appreciation and diversify our asset class,” Okpala said.
NGX Group provides a wide range of services including listing and trading securities, licensing, market data solutions, ancillary technology, regulation and real estate among others. It has three wholly-owned subsidiaries – NGX Exchange, NGX REGCO, and NGX RELCO. NGX Group also has controlling stake in CSCS and substantial stakes in other securities exchanges including FMDQ and NASD Plc.
Founded in 2009, VFD Group’s business model allows it to operate in major sectors of the economy through its portfolio businesses, providing financial advisory, asset management, real estate, technology, debt and private funds management services, hospitality, insurance brokerage and media. The group identifies solution-driven, consumer-centric businesses with growth and economic potential and also goes a step further by providing investee companies with the required resources and guidance needed to maximise potential.
The NGX in 2021 completed its demutualisation with the conversion of the mutual, member-owned, not-for-profit entity, the Nigerian Stock Exchange (NSE) to a profit-making, public limited liability company with clearly defined shareholdings and shareholders.
With the demutualisation, a new non-operating holding company, the Nigerian Exchange Group Plc (NGX Group) was created and its shares were allotted to former members of the defunct NSE. The NGX Group has three operating subsidiaries, namely: Nigerian Exchange Limited (NGX Limited), the operating exchange, which took on the listing and trading function of the NSE; NGX Regulation Limited (NGX RegCo), the independent regulation company which took on the self regulatory functions of the NSE; and NGX Real Estate Limited (NGX RELCO), the real estate company that took ownership of real estate and other assets, including the iconic Stock Exchange building in Lagos.
According to the scheme of arrangement for the conversion, NGX Group has an authorised share capital of 2.5 billion ordinary shares. About 2.0 billion ordinary shares of 50 kobo each were registered with SEC and issued in the immediate period of the conversion. The post-demutualisation shareholders’ base consisted of 255 institutional shareholders and 177 individual shareholders.
The post-demutualisation shareholding arrangement was arrived at by converting the existing dealing members of the Exchange to institutional shareholders and ordinary members to individual shareholders. Shareholdings were on equal basis in the immediate conversion period with each institutional shareholder holding 6.01 million ordinary shares of 50 kobo each while each individual shareholder held 2.44 million ordinary shares of 50 kobo each. Thus, each institutional shareholder held 0.3 per cent equity stake while each individual shareholder held 0.1 per cent equity stake, in line with the current membership-share conversion ratio of 78 per cent for dealing members and 22 per cent for ordinary members.