Zenith Bank Plc has finalised its intentions to raise around N290 billion in new capital, which is more than the N230 billion required to satisfy the Central Bank of Nigeria’s recent recapitalization mandate.
The capital raise was disclosed at the bank’s rights issue/public offer signing ceremony on Monday in Lagos, according to a statement released by Zenith Bank on Monday.
The lender states that a rights issue and a public offer will be combined to raise the capital, according to The Punch.
It further stated that 2,767,251,036 ordinary shares of 50 kobo each would be made available to new investors at N36.50 per share through the public offer, while 5,232,748,964 ordinary shares of 50 kobo each would be offered through the rights issue at N36.00 per share.
It noted that the rights issue allows existing shareholders to purchase more 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.
The Group Managing Director/Chief Executive Officer of Zenith Bank Plc, Dr Adaora Umeoji, said, “Today, we signed the transaction documents with respect to Zenith Bank’s N290bn rights issue and public offer. This is slightly above the N230bn required for us to meet the CBN’s minimum recapitalisation requirement.
“We are extremely pleased with the level of enthusiasm we have already seen from our existing shareholders for the Rights Issue. Beyond 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.
“In 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. Specifically, 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.”
She further said that the capital raise’s proceeds will be used to fund continuous working capital assistance, technology infrastructure investments, and the expansion of banking activities in Africa and abroad.
The Chief Executive of Stanbic IBTC Capital Limited, Mr Oladele Sotubo praised Zenith Bank’s management for their dedication to the deal, which gives current shareholders a chance to strengthen their holdings and urged new investors to join Zenith Bank’s journey towards the future.
He also expressed appreciation for the opportunity for Stanbic IBTC Capital Limited to lead and direct the execution of the transactions.
He added, “A combined offer that is both a rights issue and a public offer confirms Zenith Bank’s position as a pacesetter and a role model, which will undoubtedly spur more transactions in the capital market.”
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.
The Offer will start on Thursday, August 1, 2024, and close on Monday, September 9, 2024.
The Central Bank of Nigeria ordered Deposit Money Banks to recapitalize by the end of March. The CBN recapitalization circular states that commercial banks with international authorization must raise their capital bases to N500 billion, national banks to N200 billion, and regionally authorized banks to N50 billion. Also, In the same way, non-interest banks that hold regional and national authorizations must raise their capital to N10 billion and N20 billion, respectively.
According to the CBN circular, only the share capital and share premium items on the Shareholder Fund portion of the balance sheet will be recorded in this particular cycle of recapitalisation.
