The Nigerian Exchange Group (NGX Group) has announced plans to bolster its capital base through a rights issue aimed at raising approximately N10 billion.
The move, subject to shareholder and regulatory approval, underscores the group’s commitment to fortifying its financial position and supporting its strategic initiatives.
Outlined in the notice of its Annual General Meeting (AGM), the proposal entails raising capital via a rights issue, with the issuance of ordinary shares.
Shareholders are slated to deliberate and vote on the matter during the upcoming AGM, scheduled for later this month.
The rights issue plan includes provisions for the company to increase its share capital from N1,102,309,954 to N1,347,309,954, or to adjust it as deemed necessary to accommodate the proposed capital raise.
Should there be an under-subscription of shares, the company is authorized to offer any unsubscribed shares at a price not lower than that specified in the rights issue circular.
Also, shareholders will consider amending Clause 6 of the Company’s Memorandum of Association to reflect the adjusted share capital, accommodating an additional 490,000,000 ordinary shares of N0.50 each.
NGX Group’s move to raise capital comes on the heels of its audited results for 2023, which revealed a profit after tax of N5.2 billion. The company also proposed a final dividend of N1.5 billion.
The audited results showcased a robust performance, with gross earnings surging by 57.4% to N11.8 billion in 2023 compared to N7.5 billion in 2022. This growth was attributed to solid performances across core revenue and other income segments.
Transaction fees, listing fees, rental income, and treasury investment income all saw significant increases, contributing to the overall positive financial results.
Temi Popoola, the Group Chief Executive Officer of NGX Group, expressed satisfaction with the operational performance, highlighting notable improvements in transaction and listing fees, as well as in rental and treasury investment income.
The proposed rights issue reflects NGX Group’s proactive approach to strengthening its financial foundation amidst dynamic market conditions. If approved, the capital raise is expected to provide the company with additional resources to pursue strategic initiatives, enhance operational efficiency, and support its role as a leading financial market infrastructure provider in Nigeria.
Shareholders and stakeholders await the outcome of the AGM, anticipating further details on the rights issue and its potential implications for NGX Group’s growth trajectory.