FBN to raise N150 billion in rights issue

FBNHoldings Plc has opened its Rights Issue, offering 5.983 billion ordinary shares at 50 kobo each, priced at ₦25 per share, totaling ₦150 billion, to existing shareholders.This offer, available to existing shareholders on the basis of one new share for every share held as of October 18, 2024, aims to recapitalise FBNH’s flagship subsidiary, First Bank of Nigeria Ltd. (FirstBank), invest in automation and digital Banking and support International Business expansion

From the proceeds of the rights issue, FBN Holdings will invest ₦103.12 billion (68.95%) to improve the capital adequacy ratio (CAR) of its banking subsidiary, First Bank. It also plans to invest ₦29.46 billion (19.7% of the proceeds) on international expansion, while 9.85% of the capital raised—-₦14.73 billion, will be used to upgrade First Bank’s digital banking infrastructure and automation systems. This according to Nnamdi Okonkwo, FBN Holdings’ GMD.

Okonkwo also announced ambitious plans to boost capital, citing that the company currently has ₦270 billion in share capital, with the Central Bank of Nigeria (CBN) requiring banks with international license like itself to have a minimum share capital of ₦500 billion. To achieve this, apart from conducting the ₦150 billion capital raise, at the next Annual General Meeting (AGM), the bank will seek shareholder approval to add another ₦350 billion. This would bring their total capital to ₦730 billion, surpassing the regulator's requirement by ₦230 billion.

Banwo & Ighodalo and Olaniwun Ajayi act as legal advisers. Financial advisors and issuing houses include Greenwich Merchant Bank Coronation Merchant Bank Cowry Asset Management Limited Dynamic Portfolio Limited First Ally Marathon Asset and Fund Management Limited MBC Capital Markets Advisors Anchoria Advisory Services Limited FBNQuest Renaissance Capital Meristem Nigeria Apel United Capital Plc Radix, Stanbic IBTC.