banking
The stage is now set for First Bank of Nigeria Plc to become one of the most capitalized bank in Nigeria as its board of directors and financial advisors rose from a completion board meeting yesterday to shop for N100 billion from both its existing shareholders and potential investors through the floor of the Nigerian Stock Exchange (NSE).
The deal to the hybrid offering (public and right issues) was sealed in Lagos by all parties to the issue. The authorities of the Nigerian Capital Market, Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange gave a nod to the widely acclaimed ‘largest offering’ in the annals of the Nigerian Capital Market.
Prospectus to the offering showed that the dual offering will break on Monday, 14 th of May 2007 and close on Thursday, June 21, 2007.
Over 3,000,000,000 units of shares would be available for sale within the one month period when the offering would be on.
Breakdown of the deal, according to the prospectus showed that more shares would be made available for sales to prospective investors in the bank. Specifically, 1,624,253,238 units of ordinary shares of 50kobo each valued at N33 per share would be sold in the public offering while the existing shareholders of the bank would be given the opportunity to exercise their rights with 1,496,762,682 ordinary units of shares at N31 each. They (existing shareholders) would have a right to one new share for every seven already owned in the bank.
The N96 billion net income from the offerings would be splashed on major projects which include branch expansion, branch mordernisation, increase in equity investment in subsidiaries, especially FBN Bank (UK) Limited and FBN Mortgages Limited among others.
However, bulk of the proceeds of the fund (N27.14billion) or 28.3 per cent would be splashed on boosting the working capital of the bank.
Parties to the offering include IBTC Chartered Bank Plc, Oceanic Bank International Plc, Guaranty Trust Bank Plc, Premium Securities Limited (Lead Stockbroker), BGL Securities Limited, BFCL Assets&Securities Limited, Future View Financial Services Limited among others.
Meanwhile the board of directors of First Bank of Nigeria is very confident about the success of the fund raising process.
Alhaji (Dr.) Umaru Abdul Mutallab, chairman of the bank disclosed at the completion board meeting “This is one offer that will be well oversubscribed. By my estimation, it would hit about 200 per cent oversubscription”. He expressed confidence in the quality of the parties to the offering.
Mr. Atedo Peterside, managing director/CEO, IBTC Chartered Bank, a party to the offering also corroborated Mutallab, saying: “This is one Elephant that does fly. I bank with First Bank of Nigeria Plc and also encourage my staffs to do the same. This is the largest offer in the history of the Nigerian Capital Market and it is very well priced.”
First Bank has been very consistent in rewarding its shareholders in the years past. A recent survey on return on investment in the banking industry for the first quarter period ended March 31, 2007 conducted by FSDH Limited showed that only GT Bank Plc surpassed its record in the review period.
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