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Diamond Bank Extends $400m GDR Offer


December 03, 2007


Following the \'growing interest\' in the on going Diamond Bank Plc’s $400million Global Depositary Receipts (GDRs), the bank has extended its offer.


The Domestic GDR Offer, which opened on Tuesday November 20, 2007 will now close on Monday December 10, 2007, the same time with the international offering ($100 million), which is expected to open this week after which the settlement price of the offer will be determined.



Specifically, Diamond Bank is offering US$400 million through a domestic GDR and an International offer of US$100 million.



And if feelers from the banking industry are anything to go by, the bank’s ongoing $400 million GDRs offering is receiving patronage from investors, especially following the bank’s road shows held in Nigeria and some strategic cities the Europe.



 THISDAY checks revealed that during the road shows, which commenced  a few days ago in London and Frankfurt, and later in other parts of Europe and United States of America, the offer was well received. Major stakeholders are said to be convinced of the success of the offer given the positive feedback from potential investors.


A source said what facilitated the acceptance and endorsement was the bank’s impressive results and performance in the last three financial years.



According to the source, “the bank’s commitment to excellent service, innovation, investment in people, business integrity and good corporate governance are the key catalysts for its growth, as it has clear strategies to take advantage of many opportunities in the emerging markets and to continuously position itself as a leading brand in the financial industry”.



Each of the GDR represents ownership of 100 shares of Diamond Bank shares. After the conclusion of the offer and allotment, the GDR will be listed on the Professional Securities Market (PSM) of the London Stock Exchange (LSE) and traded independently from the underlying shares. Investors however, have the option of converting the GDRs to ordinary shares of Diamond Bank upon allotment. The reference price of $13.75 per GDR translates into N16.50 per Diamond Bank share at a reference exchange rate of N120/US$1. Investors can pay either in dollars or Naira and have the privilege of earning dividends in dollars



During the road show in Lagos, the Managing Director of Diamond Bank, Mr. Emeka Onwuka, explained that the London listing of the GDR is an important step in the evolution of Diamond Bank’s strategy and is aimed at raising capital for growth, attracting new shareholders and raising its international profile. The offer prospectus, he explained, indicates that the proceeds will be used to grow and develop the bank to a reputable financial conglomerate.


He said it will also enhance the leadership position of Diamond Bank in the middle market as well as enhance product and industry expertise in the corporate sector.



The offer proceed will also enable the bank to expand its footprint through traditional and electronic channels in order to seize the retail wave, enter new business segments like Mortgages; Insurance and Investment Banking.



The bank is also expected to strengthen its West Africa expansion towards capturing the growth opportunities in that axis Diamond Bank is one of the strongest banks in the country and its core strengths lies in its unique Small and Medium Enterprise (SME) business model, which has made the Bank a leading bank in small to medium size enterprise market.


The bank’s market track record covers the diverse Micro, Small and Medium scale Enterprises (MSMEs) sector.



The bank had its first major foreign equity capital injection in April 2007 when an international consortium led by Actis Capital LLP, as strategic investor, injected $134 million into the Bank. The investment gave Actis a 19.1 percent stake in the Bank. Actis is a leading private equity investor in emerging markets, having significant investments across Africa,

China, India, South East Asia and Latin America. Actis’ approach to investment is long-term and partner-oriented.


Morgan Stanley & Co. International plc is the global co-ordinator and sole bookrunner of the GDR offering while Vetiva Capital Management Limited is acting as domestic co-ordinator and joint domestic underwriter. The other Domestic Underwriters are IBTC Chartered Bank Plc, PlatinumHabib Bank Plc, Access Bank Plc, Ecobank Nigeria Plc, BGL Securities Limited, Afribank Capital Markets Limited, Fidelity Bank Plc, Greenwick Trust limited and Sterling Capital Markets Limited.

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