By Adedapo Adesanya
Zenith Bank Plc has gone to the capital market for N290 billion through a combination of a rights issue and a public offer in compliance with the revised minimum capital requirements for Nigerian commercial banks introduced by the Central Bank of Nigeria (CBN).
In March 2024, the CBN announced revised minimum capital requirements for Nigerian banks and for lenders like Zenith Bank with international presence, it has to recapitalise to N500 billion.
At the Zenith Bank Rights Issue/Public Offer signing ceremony on Monday, in Lagos, the lender said in a statement that the proceeds from the combined offer would be used to bolster its capital base and support its growth trajectory across its banking and non-banking subsidiaries.
The rights issue offers 5,232,748,964 ordinary shares of 50 Kobo each at N36.00 per share, while the public offer presents 2,767,251,036 ordinary shares of 50 Kobo each at N36.50 per share.
The rights issue allows existing shareholders to purchase additional shares in proportion to their current holdings on one new ordinary share for every six existing ordinary shares held as of Wednesday, July 24, 2024.
As for the public offer, it is for the general public and aims to attract new investors.
“Today, we signed the transaction documents with respect to Zenith Bank’s N290 billion rights issue and public offer. This is slightly above the N230 billion required for us to meet the CBN’s minimum recapitalisation requirement.
“We are extremely pleased with the level of enthusiasm we have already seen from our existing shareholders for the Rights Issue. Beyond existing shareholders, incorporating a public offer is crucial to ensure that our customers, who are not yet shareholders, can have the opportunity to join in the ownership of this premium brand.
“In terms of Tier-1 Capital, Zenith Bank has been adjudged by The Banker, Financial Times to be number one in Nigeria and the only Nigerian Bank in the top 600 banks globally. Over the years, we have consistently rewarded our esteemed shareholders.
“Specifically, in the last five years, we have maintained the record as the highest dividend-paying Bank in Nigeria. In 2023, we set a record as the only Nigerian Bank to pay a dividend of N4 per share,” the chief executive of Zenith Bank, Mrs Adaora Umeoji, said.
She added that the proceeds from the capital raise will be channelled towards expanding banking operations across Africa and internationally, investing in technology infrastructure, and supporting working capital on an ongoing basis.
She also expressed optimism that given Zenith Bank’s track record of profitability and consistency in creating wealth for shareholders, the capital raise will be a resounding success, adding that Zenith Bank will maintain its leadership in dividend payout in the years ahead and encouraged them to invest in value and invest in Zenith Bank.
The chief executive of Stanbic IBTC Capital Limited, the lead issuing house of the offers, Mr Oladele Sotubo, commended the management of the lender for their commitment to the transaction, which provides an opportunity for existing shareholders to consolidate their position and welcomes new investors to join the journey towards the future of Zenith Bank.
“A combined offer that is both a Rights Issue and a Public Offer confirms Zenith Bank’s position as a pacesetter and a role model, which will undoubtedly spur more transactions in the capital market,” he said.