FCMB Group said its proposed N110.9 billion capital raise via public offer is intended to enhance its capital base and strategic business expansion growth.
The Group commenced its public offer of 15.197 billion shares at N7.30 per share, amounting to N110.9 billion on July 29, 2024 and expected to close on September 4, 2024.
The Group CEO, FCMB Group, Ladi Balogun stated this at the Group ‘Facts Behind the Offer’ presentation held at the Nigerian Exchange (NGX), Lagos, yesterday.
He said that this strategic move is part of the bank’s comprehensive plan to meet the Central Bank of Nigeria’s (CBN) capitalization requirements, saying that in addition to its public offer, the Group has adopted a three-phased approach to raise up to N397 billion additional capital to drive its diversification plans including incorporating a Technology Holding Company by 2026.
Balogun stated that “the first phase, which aims to generate N150 billion through a public offer of 15.12 billion shares at N7.30 totaling N110.9 billion. Also, a private placement of about $40 million to $50 million which will close by the end of the year and convertible by next year. The public offer will enable us to swiftly meet market demands while ensuring simplicity and speed in execution.”
He added the second phase involves selling minority interests in one or two of its subsidiaries, with the aim of raising between N80 to N100 billion bringing the total capital raised to approximately N250 billion, saying that “by selling minority stakes, we avoid over-diluting our shareholders and recognize the undervalued potential of our subsidiaries.”
According to him, the final phase, set for the end of 2025, will involve a private placement with identified potential investors. FCMB aims to complete all phases and attained the amount of the recapitalisation of N50 billion.
He added that “the FCMB is growing at approximately two million customers a year and we believe that growth rate will accelerate. In banking, we are about number seven in net assets. We have the aspirations to move to tier one banking from the present tier two. And this capitalisation effort is a key step to getting us there. We are the top five Pension Fund Administrators (PFA), and we have our sights clearly set on getting to the top three by the end of next year.
“Our goal is to ensure we sustain and grow earnings per share for our investors despite the significant share issuance. The proceeds from this capital raise will primarily drive business growth, focusing on lending to key sectors such as agriculture, SMEs, and non-oil exports. We believe these sectors are vital for Nigeria’s development,” he stated.
On his part, the CEO of NGX, Jude Chiemeka, expressed confidence that FCMB would be successful in its capital raising plans. He noted the efforts of the Exchange in ensuring a seamless process, urging potential stakeholders and investors to leverage the NGX Invest platform to partake in the public offer.
“We have continued to deploy technology to drive a digital Exchange while making onboarding hassle-free for every investor. There is a whole demographic of young investors out there who can leverage our digital platform to partake in this offer and become part of the NGX family.”
