Dipo Olowookere
By Dipo Olowookere
Pioneer non-interest bank in Nigeria, Jaiz Bank Plc, is in search of N10 billion to expand the business operations in the country.
According to a notice from the lender, this money is expected to be sourced from fresh investors through the sale of new shares of the organisation under a private placement.
A private placement is the sale of stocks directly to a private investor and the price is normally higher than the market value.
Later this month, the company will hold an Extraordinary General Meeting (EGM) to seek approval of shareholders for the transaction.
The meeting is expected to take place at the bank’s corporate head office at Kano House, Central Business District, Abuja on Wednesday, October 28 at 11am.
During the EGM, the board will seek shareholders’ authorisation to raise additional capital of N10 billion by way of a private placement and then create 20 billion ordinary shares of the company at the rate of 65 kobo per unit to the new investors.
Thereafter, they will seek approval of the Nigerian Stock Exchange (NSE) to list the placement shares on the trading platform of the exchange. This is expected to increase the total issued and fully paid-up shares of Jaiz Bank from the current 29,464,249,300 and further dilute the shares and the earnings per share (EPS) because of the increase.
The EPS mainly shows the profitability of a company’s stock in a given period and it is calculated by dividing the net profit by the total number of outstanding shares.
The N10 billion, as the financial institution explained, is “required to fund the bank’s branch expansion drive, enhance its information technology (IT) infrastructure, and enhance its working capital to meet the needs of its teeming customers.”
As at press time, Business Post gathered that the share price of Jaiz Bank, which closed on Wednesday at 61 kobo per unit, was down by one kobo to 60 kobo per unit.
