*Zenith Bank Plc announces a fresh capital raise of N230billion with the Rights Issue offering 5,232,748,964 Ordinary Shares of 50 Kobo each at N36.00 per share, while the Public Offer will be presenting 2,767,251,036 Ordinary Shares of 50 kobo each at N36.50 per share to new investors in the financial institution

Isola Moses | 绿帽献妻

Zenith Bank Plc has announced it concluded plans to raise about N290billion fresh capital, far higher than the N230billion it needs to meet the fresh recapitalisation mandate of the Central Bank of Nigeria (CBN).

Announcing the development in a statement issued Monday, July 29, 2024, the leading commercial bank in Nigeria noted it disclosed the new capital raise at its Rights Issue/Public Offer signing ceremony held in Lagos.

绿帽献妻 reports the Zenith Bank Plc offerings open Thursday, August 1, 2024, and close Monday, September 9, 2024.

The bank, in a statement, said that the capital raise exercise would be a combination of a Rights Issue and a Public Offer.

The bank further explained the Rights Issue would be offering 5,232,748,964 ordinary shares of 50 Kobo each at N36.00 per share, while the public offer would be presenting 2,767,251,036 ordinary shares of 50 kobo each at N36.50 per share to new investors.

It noted that the Rights Issue would allow existing shareholders to purchase additional shares in proportion to their current holdings, and offered based on one new Ordinary Share for every six existing Ordinary Shares held as of Wednesday, July 24, 2024.

According Zenith Bank, the Public Offer also, is open to the general public and it is designed to attract new investors.

Speaking on the arrangement, Dr. Adaora Umeoji, Group Managing Director/Chief Executive Officer (CEO) of Zenith Bank Plc, said, 鈥淭oday, we signed the transaction documents with respect to Zenith Bank鈥檚 N290bn Rights Issue and Public Offer.

鈥淭his is slightly above the N230billion required for us to meet the CBN鈥檚 minimum recapitalisation requirement.鈥�

Dr. Umeoji stated: 鈥淲e are extremely pleased with the level of enthusiasm we have already seen from our existing shareholders for the Rights Issue.

鈥淏eyond existing shareholders, incorporating a public offer is crucial to ensure that our customers, who are not yet shareholders, can have the opportunity to join in the ownership of this premium brand.鈥�

She also noted: 鈥淚n terms of tier-1 capital, Zenith Bank has been adjudged by The Banker, Financial Times to be number one in Nigeria and the only Nigerian Bank in the top 600 banks globally. Over the years, we have consistently rewarded our esteemed shareholders.

鈥淪pecifically, in the last five years, we have maintained the record as the highest dividend-paying Bank in Nigeria. In 2023, we set a record as the only Nigerian bank to pay a dividend of N4 per share.鈥�

She revealed the proceeds from the fresh capital raise would be channelled into expansion of banking operations across Africa and internationally, investing in technology infrastructure, and supporting working capital on an ongoing basis.

Speaking on the occasion, Mr. Oladele Sotubo, Chief Executive of Stanbic IBTC Capital Limited, commended the Management of Zenith Bank on its commitment to the transaction.

Sotubo noted such commitment has offered an opportunity for existing shareholders to consolidate their position and welcome new investors to join the journey towards the future of Zenith Bank.

He also expressed gratitude for the opportunity for Stanbic IBTC Capital Limited to lead and guide the execution of the transactions.

鈥淎 combined offer that is both a Rights Issue and a Public Offer confirms Zenith Bank鈥檚 position as a pacesetter and a role model, which will undoubtedly spur more transactions in the capital market,鈥� Sotubo noted.

Stanbic IBTC Capital Limited is the lead issuing house for the rights issue and public offer with joint issuing houses, including Quantum Zenith Capital & Investments Limited, CardinalStone Partners Limited, Meristem Capital Limited, Chapel Hill Denham Advisory Limited, Coronation Merchant Bank Limited and Vetiva Advisory Services Limited.

It is recalled that the CBN late March 2024, had directed the country鈥檚 Deposit Money Banks (DMBs) to recapitalise.

In a circular to banks and other financial institutions, the banking regulator stated the commercial banks with international authorisation are to increase their capital base to N500 billion and national banks to N200 billion while those with regional authorisation are expected to achieve a N50 billion capital floor.

Similarly, non-interest banks with national and regional authorisations will need to increase their capital to N20 billion and N10 billion, respectively.

The CBN said only the share capital and share premium items on the Shareholder Fund portion of the balance sheet would be recognised in this particular round of recapitalisation.

Besides, the banks are required to meet the minimum capital requirement within 24 months commencing from April 1, 2024, and terminating on March 31, 2026, using the options of raising additional capital, mergers and acquisitions and licence change, noted the CBN in the circular.

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