Vibrant financial institution, Fidelity Bank Plc has launched a hybrid capital raising plan aimed at sourcing some N90 billion in new equity funds from existing and new shareholders.
In a regulatory filing on Wednesday at the Nigerian Exchange (NGX), Fidelity Bank indicated that it plans to issue 13.2 billion ordinary shares of 50 kobo each to new and existing investors to boost the bank’s capital base.
The board of directors has scheduled an extraordinary general meeting of shareholders for next month to approve the planned capital raising.
Shareholders are expected to increase the share capital of the bank from N16 billion or 32 billion shares to N22.6 billion or 45.2 billion shares through creation of additional 13.2 billion ordinary shares of 50 kobo each
Under the plan, the bank is seeking to float a public offer of 10 billion shares and a rights issue of 3.2 billion shares. The rights issue will be allotted on the basis of one new share for every 10 shares held.
At the current market valuation, market analysts estimated that the bank may be able to raise some N90 billion, although the final offer prices may be determined by the market situation and the extent of discount the bank prefers for its rights issue.
The bank explained that it needed the new capital to sustain its current strong growth trajectory in order to increase profitability, domestic and international expansion and enhancement of its digital capabilities. “Advances in technology, the rapid evolution of the business of banking and changes in the operating landscape make it imperative that the bank remains agile, adaptable and properly positioned to respond appropriately to developments, whilst remaining a competitive and forward looking institution,” the bank stated.
According to the bank, the new hybrid capital raising is aimed at ensuring that the bank can take advantage of emerging business opportunities and secure long term profitability and competitive advantage, while ensuring increased shareholder value.
The board of the bank urged shareholders to approve the resolutions for the hybrid capital raising at the forthcoming meeting.
Credit: thenationonlineng.net
