By Aduragbemi Omiyale
In other to meet the minimum capital requirement set by the Central Bank of Nigeria (CBN) and remain in operation as a banking institution, Fidelity Bank Plc will source N127 billion through a combination of a rights issue and a public offer.
The central bank has asked financial institutions, particularly deposit money banks (DMBs), to increase their capital base within two years.
The lender, in a statement, said it intends to raise N29.6 billion from a rights issue and N97.5 billion from a public offer, and subscriptions will commence on Thursday, June 20, 2024, and close on Monday, July 29, 2024.
These funds, according to the company, would be used to support its efforts to drive sustained growth and diversification of its earnings base through investments in IT infrastructure, business and regional expansion, and investment in product distribution channels.
The chief executive of Fidelity Bank, Mrs Nneka Onyeali-Ikpe, while speaking at the signing ceremony held at the board room of the headquarters of the firm in Lagos on Wednesday, assured that the bank will meet the March 2026 deadline of the CBN for recapitalisation.
Business Post reports that the rights issue and public offer were approved by the company’s shareholders at the Extra-Ordinary General Meeting (EGM) held on Friday, August 11, 2023.
Under the rights issue, 3,200,000,000 ordinary shares of 50 kobo each will be offered in the ratio of one new share for every 10 shares held as of January 5, 2024, at N9.25 per unit. For the public offer, the lender is offering 10,000,000,000 ordinary shares of 50 kobo each at N9.75 per unit.
Stanbic IBTC Capital is the lead issuing house to the combined offer, while the joint issuing houses are Iron Global Markets Limited, Cowry Asset Management Limited, Afrinvest Capital Limited, FSL Securities Limited, Futureview Financial Services Limited, Iroko Capital Market Advisory Limited, Kairos Capital Limited and Planet Capital Limited.
Commenting on the exercises, the chief executive of Stanbic IBTC Capital, Mr Oladele Sotubo, praised Fidelity Bank for being at the forefront of achieving the CBN’s revised minimum capital requirements for Nigerian commercial banks, expressing confidence that the deal would encourage other corporates to tap into the equity capital markets to raise funding to meet their strategic business needs.