Business
FCMB Group to raise additional capital, schedules EGM for December 19
FCMB Group Plc has proposed an additional capital raise from N150 billion (One Hundred and Fifty Billion Naira) to up to N340 billion (Three Hundred and Forty Billion Naira)
An Extraordinary General Meeting (EGM) has been scheduled to hold on Thursday, December 19th, 2024 to pass the resolution.
In an Explanatory Notes to Shareholders, FCMB Group Plc stated thus:
“Dear shareholders, as you are aware, on March 28, 2024, the Central Bank of Nigeria announced an upward review of the minimum capital requirements for banks in Nigeria, which impacts the Group’s flagship banking subsidiary, First City Monument Bank Limited, a Nigerian bank with an international license. These new capital requirements for banks are to be achieved within 24 months from April 1, 2024 to March 31, 2026.
At the 11th Annual General Meeting (AGM) of May 24, 2024, the Group obtained shareholders’ approval for a capital raise plan of up to N150 billion and to increase the company’s share capital by the creation of additional 19,802,710,781 ordinary shares. As a first step in executing the Group’s capital raise plan, the Group launched a public offer to raise up to N110 billion, which closed on September 4, 2024, is currently undergoing regulatory review
The offer, based on feedback received from the Issuing Houses, and subject to regulatory approvals, was oversubscribed, receiving strong demand from investors across various classes. This oversubscription reflects robust investor confidence and underscores the Group’s strong performance in recent years and its significant growth potential.
To address the anticipated oversubscription in the Public Offer and to achieve execution of further steps in the Group’s capital raise plan, the Directors have proposed the resolutions above to:
Increase the Group’s capital raise from up to N150 billion to N340 billion to fully address the capital needs of FCMB Limited in line with the CBN’s revised capital requirements.
Leverage on the strong investor demand by accepting surplus monies from the oversubscription of the public offer, subject to requisite regulatory approvals.
Increase the Group’s share capital by the creation and addition of ordinary shares required to achieve the N340bn capital raise.
Ensure full allotment for investors in the public o‑er, thereby reducing the amount of capital that may be required for subsequent capital raise phases, and brings the Group closer to achieving its recapitalization goals.
The Directors have also proposed the issuance of a convertible loan of up to US$15,000,000 (Fifteen Million United States Dollars) which protects shareholder returns and leverages on the momentum from the public offer. The capital raised from select investors will convert into common equity on a mandatory basis at a future date.
Opting for a convertible loan instead of a direct equity capital raise such as the recently concluded public offer ensures that no ordinary shares will be created or issued to the loan providers at financial close, thereby limiting any dilutive effects of a further increase in the number of shares.
The Group is evaluating several non-dilutive capital-raising options, including the potential divestment of a minority stake in one or more of its operating subsidiaries, subject to the creation of value. Where any such divestment transactions are undertaken, the Group will invest the proceeds thereof into the Bank to further meet the recapitalisation requirements. This would not result in any changes to existing shareholders’ holdings in the Group, with the subsidiaries remaining a part of the Group post transaction”.