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Fidelity Bank applies to raise N49bn from capital market


July 31, 2007/Punch



The Nigerian Stock Exchange on Monday placed the share price of Fidelity Bank Plc on technical suspension following an application by the bank to raise fresh funds from the capital market.


The price has been frozen at N11.99. This means that trading in the shares of the bank will be at that price throughout the duration of the proposed offer. The bank has applied to raise about N49.7bn through a Rights Issue and Offer for public subscription.



It was learnt that the bank would make a Rights Issue of about 412million shares of 50kobo each at N9.50 to existing shareholders. This will amount to about N3.9bn. Besides, about 4.5billion shares will be offered for public subscription that will fetch the bank about N45.88bn.



Shareholders of the bank recently gave the go-ahead to the directors to access the market for fresh funds. They approved that the money could be raised via equity and debt instruments.



The share price of Fidelity Bank has been very attractive to investors in recent times, closing as one of the most traded. Its price also soared from this year’s low of N2.15 to the current price of N11.99.



Last week for instance, 592.502billion shares worth N6.644bn were traded in 3,179 deals.



The high demand was attributed to expectation of improved results the company may record for the year ended June 30, 2007. According to the spokesman of the bank, Mr. Emma Esinna, the third quarter profit was good, rising by over 200 per cent. He said investors were hopeful that the full year results would be better.



Fidelity Bank is a merger of the old Fidelity Bank, FSB International Bank Plc and Manny Bank Plc.



When the equity was priced at N2.08 sometimes last year, the Managing Director/Chief Executive of the bank, Mr. Reginald Ihejiahi, had advised investors to buy, saying the future performance would lift the price to higher levels. –



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