Nigeria: Fidelity Bank Launches N127bn Public Offer to Boost Capital Base

Fidelity Bank Launches N127bn Public Offer to Boost Capital Base
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Fidelity Bank has initiated the process to raise approximately N127.1 billion through a public offer and rights issue to its existing shareholders, aiming to bolster its capital base in response to the Central Bank of Nigeria’s (CBN) new capitalisation directive.

In a statement released on Wednesday, the bank outlined its plans to secure N97.5 billion from the public offer and an additional N29.6 billion from the rights issue. The rights issue will provide existing shareholders with the opportunity to acquire one new ordinary share for every ten ordinary shares held as of January 5, 2024, at a price of N9.25 per share.

For the public offer, Fidelity Bank will offer 10 billion ordinary shares of 50 kobo each to the general public at a price of N9.75 per share.

The signing ceremony for the combined offer took place at Fidelity Bank’s headquarters in Lagos on Wednesday. During the event, Nneka Onyeali-Ikpe, Managing Director and Chief Executive Officer of Fidelity Bank Plc, stated, “The proceeds of the Combined Offer will be directed towards investment in IT infrastructure, business and regional expansion, and investment in product distribution channels.”

Stanbic IBTC Capital is serving as the Lead Issuing House for the Combined Offer, with Joint Issuing Houses 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.

The acceptance and application periods for the Rights Issue and Public Offer will open on Thursday, June 20, 2024, and close on Monday, July 29, 2024.

Oladele Sotubo, Chief Executive of Stanbic IBTC Capital, praised Fidelity Bank’s management for their dedication to executing the Combined Offer and for leading efforts to meet the CBN’s revised minimum capital requirements for Nigerian commercial banks. He expressed confidence that this initiative would inspire other corporations to utilize equity capital markets to fund their strategic business objectives.

Fidelity Bank’s shareholders approved the Rights Issue and Public Offer at an Extraordinary General Meeting held in August 2023. With an international operating license from the CBN, Fidelity Bank aims to raise its capital base to N500 billion within the next two years.

The CBN has already begun reviewing the capital-raising plans submitted by banks following the expiration of the April 30th deadline.

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