Diamond Bank shareholders give nod to N200bn offer
Category: Investors NewsBeat
Diamond Bank Plc has been given the go-ahead by its shareholders to raise additional capital of N200bn from the nation‘s capital market by public offer through issuance of shares or bonds.
The approval was given by shareholders during the bank‘s 18th annual general meeting in Lagos on Friday.
Its shareholders also approved the bank‘s business combination with any of its subsidiaries, to enhance return on investment, profitability and expansion.
The bank had sought shareholders‘ approval to pass the resolution subject to the approval of the appropriate regulatory authorities. It was to the effect that the directors could raise, by way of public offer, whether locally or internationally, additional capital of up to N200bn through the issuance of ordinary shares, convertible or non-convertible loan stock, medium term notes, bonds and/or any other instruments in tranches, series or proportions, at such coupon or interest rates, within such maturity periods.
Speaking on behalf of the Independent Shareholders of Nigeria, Its National Co-ordinator, Mr. Sunny Nwosu, called on the bank to do all it could to protect their investments, and look for ways to enhance its capabilities.
According to him, ”We have approved the N200bn offer, and its recommendation to enter into a business combination with any of its subsidiaries as may be determined necessary by executive management for the purpose of optimising the business of the Diamond Group. However, we need the bank to note that it is important for it to make use of non-convertible bonds for the offer.”
He commended the bank‘s board for making sure that the bank passed the recent financial audit by the Central Bank of Nigeria and called for improved returns on investment in the next financial year.
Also speaking, the Chairman, Progressive Shareholders Association of Nigeria, Mr. Boniface Okezie, urged the board of directors to express caution in its proposed offerings, especially with the bonds so that investors would not lose out through adequate return on investment.
He also said that the bank should consider listing some of its subsidiaries on the floor of the Nigerian Stock Exchange, stating that this would improve activities in the bank, and contribute positively to its bottom-line.
He also urged the bank to assist in improving the businesses of its subsidiaries in order to enhance the group‘s profitability.
In his response, the Managing Director of the bank, Mr. Emeka Onwuka, said that the bank had properly utilised the funds raised during its last offer, and was committed to increasing shareholder-value.
According to him, the bank is working hard to boost its branch network, disclosing that within the last financial year, it had increased its branches from 168-195.
On the company‘s financial performance, Onwuka noted that the bank was able to achieve a growth in its operating income despite the downturn experienced during the 2008/2009 financial year.
The bank‘s, in its result for the financial year ended April 30, 2009 recorded an increase an 80 per cent increase in its gross earnings from N60.43bn in April 2008 to N108.98bn, while, its profit after tax closed at N5.172bn from N12.82bn recorded the previous year. The bank paid out a dividend of nine kobo per share to shareholders.