Fidelity Bank To Issue Additional N78.35bn Shares

Fidelity Bank has announced plans to issue an additional 8.2 billion shares, valued at approximately N78.35 billion, in response to the expected oversubscription of its combined offering.

In a corporate disclosure on the Nigerian Exchange Limited’s (NGX) website, the bank issued a notice for an extraordinary general meeting (EGM) scheduled for July 26, 2024. Among the resolutions to be discussed is the authorisation for the bank to accept additional funds from its ongoing public offer and rights issue, driven by potential oversubscription.

The notice highlights a proposed increase in share capital, which will be a major topic at the EGM. The bank aims to raise its share capital from NGN22.6 billion (represented by 45.2 billion ordinary shares of 50 Kobo each) to NGN26.7 billion (represented by 53.4 billion ordinary shares).

This increase involves creating up to 8.2 billion new ordinary shares of 50 Kobo each, which will have the same standing as the existing shares. Specifically, 5 billion of these new shares will be allocated under the public offer, and 3.2 billion under the rights issue.

By issuing 5 billion new shares at N9.75 per share, Fidelity Bank expects to generate N48.75 billion. Additionally, the rights issue of 3.2 billion shares at N9.25 per share is projected to raise N29.6 billion, totalling N78.35 billion in the extended offering.

This capital increase is intended to manage the anticipated oversubscription of the combined offering, as the bank works towards meeting the N500 billion minimum paid-up capital requirement by March 2026.

Fidelity Bank was the first to align with the Central Bank of Nigeria’s (CBN) recapitalisation initiative, launching a combined offering from June 20 to July 29, 2024. The bank initially aimed to raise N127.1 billion through a public offering of 10 billion shares at N9.75 per share, and a rights issue of 3.2 billion shares to existing shareholders at N9.25 per share, on a one-for-10 basis.

With the proposed extension, the bank’s target has increased to N205.45 billion, up from the initial N127.1 billion.

Achieving this target, along with its current paid-up capital of N129.705 billion, would bring Fidelity Bank’s paid-up capital to N339.155 billion. The bank would then need an additional N160.845 billion to meet the N500 billion requirement.