FBN Holdings Seeks N300bn from Rights Issue, Others

By Dipo Olowookere

About N300 billion is needed by FBN Holdings Plc through a rights issue, public offering, and private placement, the board of the financial institution has said.

In a notice to the Nigerian Exchange (NGX) Limited, the company disclosed that the funds would be sourced from local and offshore investors in the Nigerian and international capital markets.

However, approvals from shareholders and regulators are required to kickstart the process, which would most likely facilitate the shoring up of the capital base of its flagship banking subsidiary, First Bank of Nigeria Limited.

Last month, the Central Bank of Nigeria (CBN) announced new minimum capital requirements for financial institutions operating in the country.

The banking sector watchdog said banks with international operations must increase their capital base to N500 billion within 24 months and N200 billion for lenders with national licences.

First Bank, like its peers, Zenith Bank, Access Bank, GTBank, and UBA, coined as ZAGUF by Business Post, has commenced the race to meet the N500 billion threshold.

In the disclosure, FBN Holdings convened an Extra-Ordinary General Meeting (EGM) for Tuesday, April 30, 2024, at 10am to obtain shareholders’ authorisation for the fresh capital raise.

The firm said the investors would be required to pass a resolution to “undertake a capital raise of up to N300 billion” by issuance of shares through “a public offering, private placement, or rights issue in the Nigerian or international capital markets, at price(s) to be determined by way of a book-building process or any other valuation method or combination of methods, in such tranches, series, or proportions and at such periods or dates, coupon or interest rates, within such maturity periods, and upon such other terms and conditions as may be determined by the board of directors, subject to obtaining the approvals of the relevant regulatory authorities.”

At the EGM, the shareholders would be expected to give the board the powers to take “all necessary actions to secure the listing and admission to trading of securities issued” from the N300 billion capital raise on the NGX “and/or on any other securities exchange(s) or market(s).