BY MICHAEL EBOH
The Nigerian Stock Exchange, NSE, has proposed a new set of listing requirements, granting a number of waivers for mining, oil and gas companies and companies with large capital base.

The NSE, in a draft of the proposed rules made available to operators in the capital market, said that mineral companies, comprising mining, oil and gas companies are exempted from fulfilling the requirements that a company seeking listing on the Mainboard must be in operation for at least three years.

The NSE is also exempting companies with market capitalization in excess of N500 billion from meeting the requirements for public float, which stipulates that the public shall hold a minimum of 20 per cent of each class of equity securities of the company.

According to the NSE, Mineral companies are exempt from three year track record requirement, noting however, that the company is required to produce a Competent Persons Report, CPR, describing nature and extent of the company’s rights of exploration, geographical characteristics of reserves, estimates of volume, expected extraction volume together with assumptions on forecast revenues and operating costs.

The NSE, however, noted that the interests of the investing public remain paramount in its decision to grant or reject an application for listing.

“The NSE retains the right to grant a listing to an applicant that does not meet all its requirement or refuse a listing to an applicant that does not comply with its listing requirement, on the ground that, in the NSE’s opinion, the grant or refusal of the listing is in the interests of the investing public,” the NSE explained.

In the review of the listing requirements, the NSE is barring companies with loss in the last three years of their operations from seeking listing.

According to the NSE, companies seeking listing in Alternative one of the Mainboard, should present a cumulative consolidated pre-tax profit of at least N300 million for the last three years, with a pre-tax profit of at least N100 million in two of those years, while those seeking listing based on its second alternative are expected to present a cumulative consolidated pre-tax of at least N600 million within one or two years.

The companies are also expected to present their three year financial statements, prepared in the International Financial Reporting Standards, with the last audited accounts, not been later than nine months and a shareholders’ fund of at least N3 billion.

The new rule is also proposing that companies seeking listing be registered as a Public Limited Liability Company; have a minimum of 300 shareholders for equity shares, with the promoters of the companies retaining 50 per cent of the shares pre-Initial Public Offer, IPO, for 12 months and the securities be fully paid up at time of allotment in line with the Securities and Exchange Commission’s, SEC, requirements for minimum threshold for a successful offer.

In the Alternative Securities Market, ASEM, segment, the NSE is proposing that companies seeking listing in this category present medium term (two years) comprehensive business plan, must have been in operation for at least two years and the presentation of a short term forecast (one year) with the last audited accounts which must not be later than nine months.

Other requirements for ASEM include, “The public shall hold a minimum of 15 per cent of each class of equity securities, promoters to retain 50 per cent of shares pre-IPO for 12 months; number of the public shareholders shall be at least 51 for equity shares among others.”