Fidelity Bank has completed the necessary preparations to secure a total of N127.1 billion through a combination of a rights issue for existing shareholders and a public offering.
The bank’s board sanctioned raising N29.6 billion via the rights issue and N97.5 billion through the public offer, as part of its strategy to enhance its capital base in alignment with the updated minimum capital requirements set by the Central Bank of Nigeria on 28 March 2024. This move is intended to bolster sustained growth and diversification of earnings for the bank.
In the upcoming rights issue, a total of 3,200,000,000 ordinary shares priced at 50 kobo each will be made available.
Shareholders as of 05 January 2024 will be entitled to receive 1 new ordinary share for every 10 shares held, at a cost of 9.25 per share.
Additionally, the public offer will include 10,000,000,000 ordinary shares at the same price of 50 kobo each but selling at a slightly higher rate of 9.75 per share.
Stanbic IBTC Capital is leading the issuance process alongside several other institutions including 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.
Fidelity Bank has announced that the acceptance and application lists for the rights issue and public offer will open on June 20, 2024, and close on July 29, 2024.
Nneka Onyeali-Ikpe, the managing director and chief executive officer of Fidelity Bank, stated that the proceeds from the offer will be used for enhancing IT infrastructure, expanding business operations regionally, and improving product distribution channels.
Oladele Sotubo, chief executive of Stanbic IBTC Capital, praised Fidelity Bank’s management team for their dedication to completing the offer and meeting the CBN’s revised minimum capital requirements for Nigerian commercial banks.
Sotubo expressed optimism that the agreement would inspire other companies to utilize the equity capital markets for funding, in order to support their strategic business objectives.
The Central Bank of Nigeria announced an increase in the minimum capital requirements for commercial, merchant, and non-interest banks on March 29.
As part of the recapitalization initiative, Fidelity Bank needs N370.70 billion to reach the N500 billion threshold, given its current capital base of N129.71 billion as per its unaudited Q1 financial report.
