VFD Group Acquires Largest Stake in NGX

By February 26, 2022 NEWS

An indigenous investment group – VFD Group Plc, has acquired the largest equity stake in Nigerian Exchange Group (NGX Group) Plc, emerging the first shareholder to own major stake in the Exchange after the demutualisation of the defunct Nigerian Stock Exchange (NSE).

In a regulatory filing yesterday by Group Company Secretary and Compliance Officer, Nigerian Exchange Group (NGX Group) Plc, Mojisola Adeola, NGX Group stated that VFD Group has acquired up to 5.17 per cent of the issued share capital of NGX Group.

VFD Group crossed the five per cent material shareholding threshold by February 16, 2022.

Rule 17.13 of the Rulebook of Nigerian Exchange Limited (NGX) (Issuers’ Rules) requires every quoted company to notify the Exchange of any material change in its shareholding.

Last year, NGX 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 have 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.

Group Managing Director, VFD Group Plc, Nonso Okpala, in an interview last week told The Nation that the group is currently building Africa’s first truly diverse business ecosystem.

“Looking ahead, one of our key strategic plans is to be a global proprietary investment firm listed on one of the world’s leading exchanges, and we are already in the process of building this. We have designed a roadmap to take us there, with industry and cross boarder expansion plans staggered along the way, and I am positive that given our trajectory and the support of our stakeholders, we will achieve this,” Okpala said.

According to him, in line with the increasing digitisation of the global economy, the group has consolidated on its various investments in tech companies and established its own fully owned technology-focused subsidiary – VFD Tech Limited which has been at the forefront of providing IT support services to the Group and also leading the various digitization initiatives across all its subsidiaries.

“We have digitised investments in artworks and at the moment, investors can own a share of the most expensive artworks across the world simply by buying units or tokens of the artwork. This is made possible through our alternative investment subsidiary – Artsplit.

“We are also replicating similar initiative in the real estate industry. We are digitising approach to real estate investing through our real estate subsidiary – HEREL. And very soon, Nigerians will be able to own a share or unit of properties in choice areas by simply buying a token of the asset which can be transferable, used as collateral for credit facilities or sold off to potential buyers at a premium,” Okpala said.

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