Sterling Bank Targets N200bn Capital Ahead Of CBN’s Recapitalisation Deadline


Agency report

Sterling Financial Holdings Company Plc is seeking the approval of its shareholders to raise N200bn fresh capital for its banking subsidiary through share issuance to the public and right issue to existing shareholders.

The company will also increase its share capital by allotting up to 40,000,000,000 shares of 50 Kobo.Board of Sterling Financial Holdings Company Plc will, at an annual general meeting ,AGM, seek shareholders’ approval to raise up to N200 billion through various methods of share issuance in the Nigerian capital market, subject to regulatory approvals.

This was contained in the group’s notice of the Annual General Meeting seen by this newspaper.This decision reflects the ongoing efforts of banks to strengthen their capital reserves in light of evolving regulatory standards.Notably, the recent introduction of minimum capital requirements by the Central Bank of Nigeria ,CBN, emphasizes the imperative to enhance the resilience of the country’s financial system, facilitating a more substantial role for lenders in fostering economic growth.According to the notice, the capital increase may be executed via rights issues, private placements, public offerings, or other transaction methods.

The pricing, coupon, or interest rates will be determined through book building or other acceptable valuation methods.

The issuance may occur in various tranches, series, or proportions, with maturity periods and dates set by the Board of Directors.Additionally, Sterling Financial Holdco will also seek approval to increase the share capital of the company by allotting up to 40 billion shares of 50 Kobo each.

These shares will rank pari-passu with the existing ordinary shares of the bank and may be issued at any time during the two-year period from the date of this resolution.

“That the Company be and is hereby authorized to raise additional capital of up to N200,000,000,000 (Two Hundred Billion Naira) through the issuance of shares in the Nigerian capital market by way of rights issues, private placements, public offerings, private and/or other transaction modes, at a price(s), coupon or interest rates determined through book building or any other acceptable valuation method or combination of methods, in such tranches, series or proportions, within such maturity periods and at such dates and upon such terms and conditions as may be determined by the Board of Directors of the Company, subject to obtaining the requisite approvals of the relevant regulatory authorities;

In furtherance of the above, the Directors be and are hereby unconditionally authorized pursuant to sections 127(1) and 149(1)(a) of the Companies and Allied Matters Act 2020 as amended by the Business Facilitation Act 2022 to increase the share capital of the Company by the allotment of up to 40,000,000,000 (Forty Billion) shares of 50 Kobo each ranking pari-passu with the existing ordinary shares of the Company at any time or times during the period of 2 (two) years from the date hereof”.At the upcoming AGM, the shareholders will also have the opportunity to consider and pass the following special resolutions:

That in the event of a Rights Issue, any shares not taken up by existing shareholders within the period stipulated under the Rights issue may be offered for sale to other interested existing shareholders and where following such offer, any portion of the shares, remain unsubscribed, the Directors are hereby authorized to offer such shares to interested investors on similar terms to the Right Issue or offer for subscription.

That the Directors be and are hereby authorized to appoint such professional parties and advisers and perform all other acts as may be necessary to give effect to the above resolutions, including obtaining relevant regulatory approvals and without limitation complying with the directives of any relevant regulatory authority.

That the Company Secretary be and is hereby authorized to register any increase(s) in shares capital with the Corporate Affairs Commission in such incremental proportions or tranches as the Board of Directors in its absolute discretion may deem necessary or desirable, and the Board of Directors is hereby authorised to issue on behalf of shareholders; such resolutions as may be required by the Corporate Affairs Commission, among others.

The group closed its trading day on Wednesday, May 29, 2024, at N4.20 per share on the Nigerian Stock Exchange ,NGX. Sterling began the year with a share price of N4.29, representing a 2.1% decline in valuation year-to-date.


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