By Ayonide Otitoju
Zenith Bank Plc has finalized plans to raise about N290 billion in fresh capital, surpassing the N230 billion requirement to meet the new recapitalization mandate of the Central Bank of Nigeria (CBN).
In a statement released on Monday, the bank announced the capital raise during the rights issue/public offer signing ceremony in Lagos. 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 of 50 kobo each at N36.00 per share, while the public offer will present 2,767,251,036 ordinary shares of 50 kobo each at N36.50 per share to new investors. Existing shareholders can purchase additional shares in proportion to their current holdings, based on one new ordinary share for every six existing shares held as of Wednesday, July 24, 2024. The public offer is open to the general public and aims to attract new investors.
Dr. Adaora Umeoji, Group Managing Director/Chief Executive Officer of Zenith Bank Plc, said, “Today, we signed the transaction documents with respect to Zenith Bank’s N290bn rights issue and public offer. This is slightly above the N230bn required for us to meet the CBN’s minimum recapitalisation requirement. We are extremely pleased with the level of enthusiasm we have already seen from our existing shareholders for the Rights Issue. Beyond existing shareholders, incorporating a public offer is crucial to ensure that our customers, who are not yet shareholders, can have the opportunity to join in the ownership of this premium brand.”
Umeoji highlighted Zenith Bank’s achievements, stating, “In terms of tier-1 capital, Zenith Bank has been adjudged by The Banker, Financial Times to be number one in Nigeria and the only Nigerian Bank in the top 600 banks globally. Over the years, we have consistently rewarded our esteemed shareholders. Specifically, in the last five years, we have maintained the record as the highest dividend-paying Bank in Nigeria. In 2023, we set a record as the only Nigerian bank to pay a dividend of N4 per share.”
The proceeds from the capital raise will be used to expand banking operations across Africa and internationally, invest in technology infrastructure, and support working capital on an ongoing basis.
Oladele Sotubo, Chief Executive of Stanbic IBTC Capital Limited, praised 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. “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,” he said.
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
In late March, the CBN directed deposit money banks to recapitalize. According to the CBN recapitalization circular, commercial banks with international authorization must increase their capital base to N500 billion, national banks to N200 billion, and regional banks to N50 billion. Non-interest banks with national and regional authorizations need to raise their capital to N20 billion and N10 billion, respectively.
The banks are required to meet the minimum capital requirement within 24 months, starting from April 1, 2024, and ending on March 31, 2026, through additional capital raises, mergers and acquisitions, or license changes.
