By Gbenga Agbana Wednesday, 1 Sep 2010
The Council of the Nigerian Stock Exchange on Tuesday approved a N9bn special placing offer for Wema Bank Plc.The placing was part of the bank‘s efforts to meet the Central Bank of Nigeria’s recapitalisation requirement.
A statement from the bank on Tuesday said, ”As part of its three-pronged approach towards recapitalising the bank, Wema Bank embarked on a special placing offer to raise an additional N9bn from a number of select high net-worth investors. The plan which has the blessing of the CBN is expected to record a huge success, going by the pre-offer commitment given by a number of investors to pick up the shares on offer.”
As part of the regulatory requirements for the approval of the special placing offer, the bank had submitted the names of the prospective investors that had signified their intention to take up the shares on offer to the NSE. The endorsement of the offer effectively means that the bank has added N9bn to its capital, a major step towards meeting the capital adequacy requirement of the apex bank.
Other aspects of the recapitalisation plan, according to the statement, include loan recovery and sale of toxic assets, which are also ongoing.Sources within the bank said it had achieved substantial progress in its loan recovery efforts and over N25bn had been recovered as at the end of July 2010.
Distressed assets valued at about N37bn, according to the bank, have also been packaged for sale to the Asset Management Corporation of Nigeria, as soon as the it commences operations, while the bank‘s efforts have also been boosted by about N6.4bn accessed under the N200bn SME Refinancing Fund.
”Wema Bank is on the threshold of recovery, as the combination of fresh capital of N9bn, loan recovery of over N25bn, the release of SME financing fund by the BOI and the proceeds from the sale of toxic assets to AMCON will take WEMA beyond the capital it requires to carry on its business as a bank under the new CBN guidelines,” the statement added.