FBN Holdings Announces Share Sale To Raise N149.6bn

FBN Holdings has announced the commencement of a significant share sale initiative, set to begin on Monday, 04 November, 2024, aimed at offering approximately 5.98 billion ordinary shares to its current shareholders.

The initiative provides an opportunity for shareholders to expand their investments and increase their stakes in the financial services group.

According to the offer prospectus, shareholders as of 18 October will be entitled to purchase one new share for every six shares already held, at a price of N25 per unit. The rights issue is scheduled to run until 12 December.

This strategic move comes amid a wave of similar capital-raising efforts by leading Nigerian banks, motivated by the Central Bank of Nigeria’s directive requiring commercial banks to meet new minimum capital requirements by 31 March 2026. Major financial institutions such as Access Holdings, GTCO, United Bank for Africa, and Zenith Bank have already bolstered their capital through rights issues or a mix of public offers and shareholder contributions.

Per the offer document, proceeds from the share sale will primarily be used to recapitalise First Bank of Nigeria Limited, a key subsidiary of FBN Holdings. The injection of new Tier 1 Capital aims to strengthen the bank’s Capital Adequacy Ratios (CAR), ensuring a solid capital base.

If successful, this share sale could increase FBN Holdings’ total issued shares to approximately 41.9 billion, raising an estimated N149.6 billion. Greenwich Merchant Bank will serve as the leading issuing house for this transaction, supported by fifteen other joint issuing houses.

Following regulatory approval from the Securities and Exchange Commission, investors are expected to receive their share allotments by 27 January, with the listing of new shares anticipated to occur a week later.

In a related development, earlier in the year, FBN Holdings divested its merchant banking unit, FBN Quest Merchant Bank, to Everquest Acquisition LLP, which includes Custodian Investments, Aion Investments, and Evercorp Industries.