Nigerian Bank Applies To Raise Funds From Capital Market
First Bank applies to raise N99.3bn from capital market
First Bank of Nigeria Plc on Tuesday began the process of raising fresh funds from the market with an application to the Nigerian Stock Exchange. The bank applied to offer 1.6billion ordinary shares of 50 kobo each to be sold at N33 per share for public subscription and 1.5billion ordinary shares of 50 kobo each at N31 per share as Rights Issue to existing shareholders.
As a result of the application, the NSE has placed the share price of First Bank on technical suspension at N40.40 per share. This implies that throughout the period of the offer, trading in the shares on the floor of the exchange would be done at N40.40.
Besides, prospective subscribers to the public offer at N33 would be enjoying a discount of N7.40, while investors that would be exercising their rights at N31 per share would be doing so at a discount of N9.40 since the current market price is N40.40.
The bank is expected to realise gross proceeds of N99.3bn from the hybrid offer, the highest in the history of the Nigerian capital market.
The managing director of the bank, Mr. Jacobs Moyo Ajekigbe, had told shareholders at an extra-ordinary general meeting in Lagos in March that the new capital would assist the bank maintain its leadership position in the Nigerian banking industry, as well as in African continent. He said the new capital drive is being propelled by the bank's vision, which is to be Africa's bank of first choice.
Ajekigbe explained that the funds would assist the bank in the modernisation of its branches and to pursue growth in its business.
He said that although the bank had upgraded some of its branches to meet up with the challenges of the times, there are still some branches of the bank that needed to be elevated in terms of architecture and ambiance.
The bank chief executive had assured the shareholders that a committee had been set up at the board level to determine an appropriate pricing for the offer, assuring them that adequate measures would be put in place to take care of their interest. ?All I assure you is that the board will be responsive to shareholders? aspiration,? Ajekigbe said.
He said that the timing for the offer is right, saying the general elections, which begins on Saturday should not be a threat to the offer. According to him, elections will come and go, but business will continue. First Bank will run a parallel campaigns as election dates draw nearer,? he said.
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