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Zenith Bank Plc has finalised plans to raise approximately N290 billion in fresh capital, exceeding the N230 billion required to meet the Central Bank of Nigeria's new recapitalisation mandate.
According to a statement from Zenith Bank on Monday, the capital raise was announced at the bank’s rights issue/public offer signing ceremony on Monday in Lagos.
According to the lender, the capital raise will be a combination of a rights issue and a public offer.
The rights issue will offer 5,232,748,964 ordinary shares at N36.00 per share, while the public offer will present 2,767,251,036 ordinary shares at N36.50 per share to new investors.
The rights issue allows existing shareholders to purchase additional shares proportional to their current holdings, while the public offer is open to the general public.
Zenith Bank's Group Managing Director/Chief Executive Officer, Dr. Adaora Umeoji, expressed enthusiasm for the level of interest from existing shareholders and the importance of the public offer in allowing the bank's customers to become shareholders.
She added that the proceeds from the capital raise would be channelled towards expanding banking operations across Africa and internationally, investing in technology infrastructure, and supporting working capital on an ongoing basis.
The Chief Executive of Stanbic IBTC Capital Limited, Mr Oladele Sotubo, commended the management of Zenith Bank for its commitment to the transaction, which provides an opportunity for existing shareholders to consolidate their position and welcomes new investors to join the journey towards the future of Zenith Bank.
He also expressed gratitude for the opportunity for Stanbic IBTC Capital Limited to lead and guide the execution of the transactions.
He added, “A combined offer that is both a rights issue and a public offer confirms Zenith Bank’s position as a pacesetter and a role model, which will undoubtedly spur more transactions in the capital market.”
Stanbic IBTC Capital Limited is the lead issuing house for the rights issue and public offer with joint issuing houses, including Quantum Zenith Capital & Investments Limited, CardinalStone Partners Limited, Meristem Capital Limited, Chapel Hill Denham Advisory Limited, Coronation Merchant Bank Limited and Vetiva Advisory Services Limited.
The Offer will commence on Thursday, August 1, 2024, and conclude on Monday, September 9, 2024.
In late March, the Central Bank of Nigeria directed Deposit Money Banks to recapitalise.
According to the CBN recapitalisation circular, commercial banks with international authorisation must increase their capital base to N500bn, national banks to N200bn, and those with regional authorisation are expected to achieve a N50bn capital floor.
Similarly, non-interest banks with national and regional authorisations will need to increase their capital to N20bn and N10bn, respectively.
The apex bank circular stated that only the share capital and share premium items on the Shareholder Fund portion of the balance sheet will be recognised in this particular round of recapitalisation.
The banks are required to meet the minimum capital requirement within 24 months starting from April 1, 2024, and ending on March 31, 2026, using the options of raising additional capital, mergers and acquisitions, and licence change.
