Nigerian Exchange clarifies resolution for long term incentive plan 

…To seek shareholders’ approval for N35bn capital raise

The Nigerian Exchange Group (NGX) has said that the resolution for the allotment of 200,419,990 ordinary shares of 50 kobo each for the operation of a Long Term Incentive Plan consisting of a Deferred Bonus Plan (DBP) and an Employee Share Purchase Plan (ESPP), was made at the Company’s 2021 AGM on 9 September 2021, for the purpose of operationalising the earlier approval of the establishment of an ESOP in 2020.

Reacting to recent media reports following the release of the Company’s notice for its upcoming annual general meeting, the Group noted that part of the approval granted by the shareholders at the 2021 AGM was for half of the total number of shares proposed for the LTIP being 100,209,995 ordinary shares of 50 kobo each to be purchased by employees under an Employee Share Purchase Plan.

The statement signed by Mojisola Adeola, Group Company Secretary said: “Under the terms of the ESPP, the shares will be offered at a discount of between 15 per cent – 20 per cent of its market price and will be purchased by employees subject to the fixed cap per employee and availability of the pool.”

The other half relates to deferred bonus under the Deferred Bonus Plan (DBP), which is earned when eligible employees meet to set performance standards annually. Neither the DBP nor the ESPP are gifts to the employees. Both are multi-year plans.

On the dividend policy, the Group said, “Despite the demutualisation and restructuring of NSE at the height of the COVID-19 pandemic and its ravaging impact on the economy, NGX Group, as a testament of its commitment to its shareholders and in readiness of providing returns to them in a sustainable manner, has published its dividend policy on its website to assist investors and the general public in understanding its value proposition.  It is important to stress that as at 2020, when the Company was still a mutual entity, it was not permitted under extant laws to declare a dividend pursuant to the 2020 Audited Financial Statements.

“It bears emphasising that the demutualisation was completed in March 2021 and the listing in October 2021, which effectively means that the NGX Group’s first full year of operations post demutualisation and as a public company is 2022. This will be reflected in the 2022 Audited Financials in due course.”

The statement noted that the company intends to raise additional capital of up to N35 billion to fund the business expansion; the growth phase for existing business lines/investments; and investments in identified and carefully curated new targets, in line with the Company’s and NGX Group’s strategy.

“As captured in the notice of the AGM, the Company does not intend to raise the entire amount in USD. NGX Group has also identified viable investment opportunities in line with its strategic expansion plans, including deepening investments in the existing portfolio companies to ensure high and steady dividend returns.

“NGX Group is therefore on course with its long-term strategy which will ensure it provides competitive returns for its investors.”