FCMB Group Plc is seeking approval from its board to raise N340 billion in capital, more than doubling its initial target of N150 billion, at the upcoming Annual General Meeting (AGM) scheduled for December 19, 2024.
The announcement was made through a notice published on the Nigerian Exchange (NGX) disclosure page and signed by the company’s secretary, Mrs. Olufunmilayo Adedibu.
In the statement, the group disclosed its plan to seek board approval at the AGM to divest part of its holdings in one or more subsidiaries, with the proceeds to be reinvested into First City Monument Bank Limited (FCMB).
Additionally, the AGM will address several other important matters, including the acceptance of any surplus funds resulting from an oversubscription of the public offer.
Other items on the agenda include increasing the bank’s issued share capital, raising capital via convertible loans to selected individuals, and appointing professional advisers to support these efforts.
What to know
FCMB is seeking approval to increase its authorized capital from N150 billion to N340 billion, or the equivalent in another currency, as decided by the board.
- To achieve this, the bank plans to issue a range of financial instruments, including shares, preference shares, convertible and non-convertible notes, loans, and bonds.
- These instruments will be offered in both the Nigerian and international markets through a variety of channels, such as public offerings, private placements, or rights issues.
- The board will determine the specific terms, pricing, and structure of the capital raise, subject to regulatory approval.
- As part of its broader strategy to meet its capital raise goals, FCMB also intends to seek approval at the upcoming AGM to divest a portion of its holdings in one or more subsidiaries.
Some of the proceeds from this divestment will be reinvested into its banking subsidiary to support its long-term strategic goals.
Other resolutions for approval
At the upcoming AGM, the group will seek approval from its board to accept any surplus funds from the oversubscription of its public offer, subject to share capital limits and regulatory approval.
As outlined in the notice:
“That pursuant to the Company’s Public Offer, which commenced on July 29, 2024, and closed on September 4, 2024, the Company be and is hereby authorized to accept surplus monies (if any) arising from oversubscription of the Public Offer in such proportion as may be determined by the Board.”
In addition, the company will seek approval to increase its share capital from N19.8 billion by issuing 39,605,421,562 new ordinary shares to help fund the N340 billion capital raise.
The group also intends to raise up to US$15 million through a mandatory convertible loan, which will later be converted into ordinary shares.
Further agenda items include the potential listing of FCMB’s securities on the Nigerian Exchange (NGX) and other international markets, the appointment of professional advisers, and authorization for the company’s secretary to complete all necessary steps with the Corporate Affairs Commission.
Backstory
On March 28, 2024, the Central Bank of Nigeria (CBN) raised the capital requirements for banks, including FCMB, mandating that the new thresholds be met by March 31, 2026.
- At the AGM on May 24, 2024, shareholders approved a plan to raise up to N150 billion in capital.
- FCMB’s public offer, being a major part of the bank’s capital-raising plans, closed on September 4, 2024, and was oversubscribed, reflecting strong investor interest.
- In the fourth quarter of 2024, FCMB’s directors are proposing to raise the capital target to N340 billion in response to the CBN’s recapitalization directive.
If the proposed resolutions are approved at the AGM scheduled for December 19, 2024, they could generate positive market sentiment, potentially boosting FCMB’s stock performance. Currently, FCMB’s stock is on a long-term upward trajectory, trading at N9.25.
