BY OTUNG GABRIEL, Abuja
Shareholders of Ecobank Transnational Incorporated (‘ETI’), the parent company of the Ecobank Group, have approved the issue of up to $400 million in convertible bonds.
The approval was made during the 29th annual general meeting and extraordinary general meeting held in Lomé at weekend.
The convertible bond issue will have a maturity of five years and a coupon of 6.46% above three months LIBOR, with an option to convert at an exercise price of 6 US cents during the conversion period.
The bonds will be on offer to all Ecobank shareholders on identical terms shortly, even as the proceeds have been earmarked to repay the bridging finance required to create a Resolution Vehicle to manage Ecobank’s legacy loan portfolio and to optimise the maturities of the Group’s debt portfolio.
Ecobank Group chairman, Emmanuel Ikazaboh, said, “We are delighted with the strength of the support shown for the issue by our existing shareholders, as it vindicates the vigorous action taken to address our challenged legacy assets, as well as indicating their confidence in Ecobank’s future.
“Nevertheless, it is a matter of great regret that the Board was unable to recommend the payment of a dividend in respect of 2016. Ecobank’s senior management is united in its firm resolve to work urgently, yet diligently, to reinstate cash dividends as soon as ETI’s financial position permits”.
Commenting on Ecobank’s recent performance, Group CEO of the bank, Ade Ayeyemi, said, “Despite continued macroeconomic challenges in some parts of the continent, all of our businesses are making meaningful progress, with an ongoing focus on cost discipline, stringent credit control and the increasing digitisation of our services to enhance the customer experience.
“We are proactively resolving our legacy loan issues, achieving $2 million of recoveries from the Resolution Vehicle in the first quarter of 2017. I am confident that these positive developments will be reflected in an improving performance from Ecobank going forward”.