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Fidelity, FCMB to raise N195bn from capital market

Category: Public Offers Private Placements

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Fidelity, FCMB to raise N195bn from capital market

July 11, 2007/ Punch



Fidelity Bank Plc and First City Monument Bank Plc will be hitting the capital market within few weeks to raise funds for the expansion of their operations.


While Fidelity is warming up to raise N100bn from the domestic market, FCMB plans to raise $750m (N95.25bn) from both the domestic and international capital market.



Access Bank Plc had only on Monday last week announced that it would shop for N70bn through a public offer billed to open this July.



Since the conclusion of the banking consolidation in 2005, Union Bank, Zenith Bank, Intercontinental Bank Plc, Oceanic Bank and First Bank of Nigeria have accessed the market for additional funds.


Our correspondents gathered that the shareholders of Fidelity Bank will on Thursday approve an increase in the authorised share capital of the bank from N10bn to N12.5bn by the creation of 5billion ordinary shares of 50kobo each.



The increase will be done at an extra-ordinary general meeting scheduled to hold in Enugu, EnuguState.


Apart from increasing the share capital of the bank, the shareholders are also expected to authorise the directors to raise additional capital up to N100bn.



It was learnt that the funds would be raised through a combination of convertible loans, equity or debt by way of private placement or offer for public subscription.



FCMB said on Tuesday that a third of the fund would be obtained in London.


Guaranty Trust Bank Plc is currently selling global depositary receipts on the London Stock Exchange.



The Chief Executive Officer, FCMB, Mr. Ladi Balogun, was quoted by Bloomberg News on Tuesday, as saying, “We have plans to raise another $750m of capital, primarily equity, which will be followed by debt.’’



“We expect that $250m of the entire capital raise will be done in the United Kingdom’’ by the end of this year.


The Nigerian Stock Exchange has made a “deliberate attempt†to build ties with the London Stock Exchange because investors and analysts in the UK understand the country and are in much the same time zone, he said.


GTBank, seeking funds for acquisitions, started selling $750m of stock on Tuesday in what may be the biggest global offering by a Nigerian firm.



About 40 per cent of FCMB’s more than 100,000 shareholders are foreigners, including George Soros’s Soros Private Equity Partners, UK-based Helios Investment Partners and the Commonwealth Development Corporation.



“Some are happy to invest through the Nigerian Stock Exchange; some will take advantage of offshore listings we’re looking at,†Balogun said.



Shares of FCMB have almost quadrupled this year, giving the bank a market value of N154bn ($1.2bn).



An official of the bank who, spoke on condition of anonymity on Tuesday, said that the fund raising would be achieved through a public offering details of which would be announced at the completion board meeting of the bank to be held next week.



According to the notice of the meeting, the proposed fund would be used to expand the business operations of the bank and to finance the international expansion project of the bank. 



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