FCMB Group has commenced its public offer of N110 billion at N7.30 kobo per share to meet the capital requirements placed on banks by the Central Bank of Nigeria (CBN).
FCMB Group is issuing 15,197,282,219 ordinary shares of 50 kobo each at N7.30 per share.
“The first phase is what we’re currently executing, where we’ll be raising a total of N150 billion through both a public offer and a small private placement as well. That phase should be concluded by October this year,” Ladi Balogun, CEO FCMB Group said on Tuesday at the Facts Behind the Offer presentation at the Nigerian Exchange Limited (NGX).
He said that the bank is pursuing a phased approach. “There are three phases to our own capital raise.”
In March the CBN announced a ten-fold jump in minimum capital requirements for banks, nearly two decades since the last exercise.
FCMB with an international license is required to raise N500 billion and currently needs N375 billion to maintain its international license.
He said that the second phase will be selling minority interests in one or two of its subsidiaries.
“where we hope to generate somewhere between 80 to 100 billion naira. So that’ll take us to about, at the upper limit, about 250 billion naira,”Balogun said.
He said the third phase will involve a private placement towards the end of next year.
“ I’ve already identified a group of potential investors. The aim is to complete all three processes to ensure we have less than 50 billion shares in issue and also make sure that we’re able to sustain and grow earnings per share for our investors in spite of the significant amounts of shares we’re issuing,” Balogun said.
He said the capital raised will be used to drive business growth, to provide capital for lending to key sectors of the economy, agricultural sector, SMEs, and non-oil exports.
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“ We’ll also be using it to invest in technology to strengthen our cyber security, it will also help us reduce our own cost of doing business and not just our own financial cost, but our cost to the planet in terms of carbon footprint,”Balogun said.
He said that it will also be used in investing in human capital.
Balogun said that it’s important to the group not to over dilute its shareholders and issue too many shares.
“So in the group holding company, we realize that the value of some of our subsidiaries is under-represented in the valuation of the total group,”
“So it actually makes sense to sell a small stake of those businesses whilst we retain control and inject that capital into the bank,”
“Ultimately, we’re a holding company, so we don’t need to hold our businesses 100 percent. And right now, we own almost all our subsidiaries practically a hundred percent so our aim is to in one or two instances to about 70 percent, Balogun said.
On his part, the CEO of NGX, Jude Chiemeka, expressed confidence that FCMB would be successful in its capital raising plans. He noted the efforts of the Exchange in ensuring a seamless process.
This is even as he urged stakeholders and potential investors to leverage the NGX Invest platform to partake in the public offer.
“We have continued to deploy technology to drive a digital Exchange while making onboarding hassle-free for every investor. There is a whole demographic of young investors out there who can leverage our digital platform to partake in this offer and become part of the NGX family,” he said.
