fidelity Bank is anticipating an over-subscription of an additional 8.2 billion shares, worth about N78.35 billion in the form of a combined offering.
In a corporate disclosure on the NGX website, the company issued a notice for an Extraordinary General Meeting to be held on July 26.
As contained in the notice, one of the resolutions to be deliberated in the EGM is that the bank be authorized to accept additional funds from its ongoing public offer and rights issue.
The move comes in response to a potential oversubscription of the combined offer. According to the notice, an increase in share capital is part of the resolutions to be deliberated upon. The bank seeks to increase 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 will be achieved by creating up to 8.2 billion additional ordinary shares of 50 kobo each, which will rank equally with the existing shares. Specifically, five billion of the new shares will be allocated under the public offer and 3.2 billion under the Rights Issue.
Issuing five billion new shares at N9.75 per share to prospective shareholders will generate N48.75 billion. Additionally, the rights issue of 3.2 billion new shares at N9.25 per share will raise N29.6 billion, bringing the total extended offering to N78.35 billion. The increase in the share capital is to accommodate potential oversubscription of the combined offering, as the bank is in a race to hit the N500 billion minimum paid-up capital before March 2026.
Fidelity Bank became the first bank to make a move in line with the CBN’s recapitalization exercise, through a combined offering which began on June 20 to close on July 29, 2024.
In the combined offering, the bank is looking 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 the basis of 1 new share per 10 shares held in the bank.
This potential extension in the bank’s offering has increased the bank’s target to N205.45 billion, from the initial N127.1 billion.
Analysts said if Fidelity Bank achieves this target, combined with its current paid-up capital of N129.705 billion, the bank’s paid-up capital will reach N339.155 billion. Consequently, the bank will require an additional N160.845 billion to meet the N500 billion target.
