By Aliyu Galadima
FCMB Group Plc has called an emergency meeting with its shareholders to obtain approval to increase and raise additional capital.
In a notice, the group told the Nigerian Exchange about plans to hold an Extraordinary General Meeting of the shareholders virtually on December 19th, 2024.
The meeting was scheduled to authorise the FCMB board of directors to increase the group capital from up to N150 billion to N340 billion with a plan to divest interest and re-plug the process into its banking arm.
According to the notice, the additional capital can be raised through the issuance of securities. The additional capital raise is subjected to obtaining the requisite approvals of the relevant regulatory authorities, the group said.
The board is also seeking shareholder consent to divest a portion of the Company’s stake in one or more of its subsidiaries as it may see fit, and as the Board deems fit.
The target is to invest such portions of the proceeds of the divestments into First City Monument Bank Limited, as part of steps to meet its capital raise objectives.
FCMB is also seeking approval to raise capital of up to US$15 million or its equivalent in Nigerian Naira, via a mandatory convertible loan offered to a select group of qualified investors.
The group said that the mandatory convertible loan inclusive of any accrued interest would be converted into ordinary shares of the Company on such terms and conditions.
The group said, “ At the 11th Annual General Meeting of May 24, 2024, the Group obtained shareholders’ approval for a capital raise plan of up to N150 billion and to increase the company’s share capital by the creation of additional 19,802,710,781 ordinary shares.
“As a first step in executing the Group’s capital raise plan, the Group launched a public offer to raise up to N110 billion, which closed on September 4, 2024, is currently undergoing regulatory review.
“The offer, based on feedback received from the Issuing Houses, and subject to regulatory approvals, was oversubscribed, receiving strong demand from investors across various classes.
“This oversubscription reflects robust investor confidence and underscores the Group’s strong performance in recent years and its significant growth potential.
FCMB told shareholders that to address the anticipated oversubscription in the public offer, achieve execution of further steps in the Group’s capital raise plan, the Directors have proposed to increase the capital raise from up to N150 billion to N340 billion.
The decision, according to the group, is to fully address the capital needs of FCMB Limited in line with the CBN’s revised capital requirements.
The bank seeks to leverage on the strong investor demand by accepting surplus monies from the oversubscription of the public offer, subject to requisite regulatory approvals and increase the Group’s share capital by the creation and addition of ordinary shares required to achieve the N340 billion capital raise.
The Directors have also proposed the issuance of a convertible loan of up to US$15,000,000 which protects shareholder returns and leverages on the momentum from the public offer.
The capital raised from select investors will convert into common equity on a mandatory basis at a future date.
The group told shareholders that opting for a convertible loan instead of a direct equity capital raise such as the recently concluded public offer ensures that no ordinary shares will be created.
