FMDQ Securities Exchange, one of Africa’s leading financial market infrastructure groups, has successfully acquired 1,080,641,902 units of Central Securities Clearing System (CSCS) shares in a transaction valued at approximately N20 billion. This acquisition confirms a previous report by BusinessDay over a year and a half ago, which stated that FMDQ Group would pay around N20 billion to acquire a 21.6 percent equity stake in CSCS Plc. Market sources indicate that transactions of this nature typically come with a premium ranging from 20 percent to 30 percent.
CSCS is a prominent clearinghouse for capital market operations in Nigeria, the largest economy in Africa. As part of the deal, FMDQ Group purchased shares owned by Leadway Insurance and Artemis Limited, a vehicle owned by Verod Capital. Leadway Insurance holds a 16.6 percent stake in CSCS, while Artemis Limited owns a 5 percent stake. Combined, their stakes amount to 1.08 billion units.
CSCS Plc currently has 5 billion tradable securities in issue, with each share trading at N17.86 on the NASD Over The Counter (OTC) market as of Friday, July 7. The recent acquisition by FMDQ Group is expected to further rally the share price of CSCS. The company’s current market capitalization stands at N89.3 billion.
As of December 31, 2022, CSCS Plc had five shareholders with over 5 percent ownership. These include Nigerian Exchange Group (44.18 percent), Access Bank (7.5 percent), UBA (5.37 percent), Artemis Limited (16.6 percent), Leadway Insurance (5 percent), and Others (21.35 percent).
On June 30, 2023, significant shares of Central Securities Clearing System Plc were traded on the NASD OTC Plc. Artemis Limited and ZPC Leadway Insurance Prem. Coll & Invest, who previously held 16.61 percent and 5 percent shareholding, respectively, sold their shares to FMDQ OTC Plc. As a result, FMDQ now holds a 21.6 percent equity stake in CSCS.
CSCS Plc operates as a Financial Market Infrastructure (FMI) company, licensed by the Securities and Exchange Commission. The company’s core activities involve the depository, clearing, and settlement of securities traded in the Nigerian Capital Market. It maintains an electronic book-entry record of all securities and facilitates safekeeping and easy transfer of securities during trades. CSCS also acts as a depository for Federal Government of Nigeria (FGN) Bonds, Municipal and Corporate Debt instruments. The company has one subsidiary, Insurance Repository Nigeria Limited, and one associate company, NG Clearing Limited, which enhance the record-keeping of insurance data and policies.
The acquisition by FMDQ Securities Exchange represents a significant milestone and underscores the growing importance of collaboration and consolidation within Nigeria’s financial market infrastructure sector.
