To raise N150 billion for current shareholders, FBN Holdings Plc has started its rights issue by offering 5.983 billion common shares at a price of N25 apiece, or 50 kobo each. The offer is set up so that, as of October 18, there is one new share for every six common shares held.
Mr. Femi Otedola, the chairman of FBN Holdings, clarified in a statement released in Lagos on Sunday to BrandSpur banking and finance news desk that the initiative’s goal is to recapitalize the company’s commercial banking division, First Bank of Nigeria Ltd.
Otedola underlined that the capital infusion will improve the bank’s ability to grow and expand its operations in both the wholesale and retail markets. He went on to say that the money would also help with automation, improve digital banking, and further the bank’s plans to expand in Africa. He urged shareholders to assert their rights, pointing out that doing so would fortify the organization and set First Bank up for long-term expansion and enhanced performance.
Mr. Nnamdi Okonkwo, the Group Managing Director, emphasised that the Rights Issue gives shareholders the chance to keep their proportionate part of the company while also offering crucial cash buffers to take advantage of business possibilities in the economy, adding that at the company’s 11th Annual General Meeting (AGM), which took place on August 15, 2023, shareholders unanimously approved the Rights Issue.
Continuing, he had this to say: “Printed copies of the participation form can be downloaded via the company’s website, FirstBank branches, and offices of the Issuing Houses. Also, the website of Meristem Registrars during the Offer Period. The application can also be made via the FirstMobile platform.
“All the existing shareholders are advised to study the rights circular carefully, and, if in doubt, consult their Stockbrokers and Portfolio Manager,” he added.
The Central Bank of Nigeria (CBN) declared in March 2024 that the capital requirements for national banks would be N200 billion, while those for tier-1 banks with international banking licenses would increase from N25 billion to N500 billion. The top bank established a two-year (24-month) deadline for fulfilling the new condition.
According to reports, First Bank of Nigeria has N251.3 billion in share capital, and it would need up to N248.7 billion to satisfy the new CBN criteria. About 60% of the minimum capital needed to reach the CBN-set target is represented by the N150 billion right issue. The current price of FBN Holdings Plc is N28.75k, which is N3.75k less than the Right Issue price of N25 per share.
