Sterling Bank Plc has announced plans to raise up to $400 million in capital through a range of financing options, including debt instruments and equity offerings.
The move comes after the bank’s 2nd Annual General Meeting, held virtually, where shareholders approved the capital raise to strengthen the institution’s growth capacity and balance sheet.
In a corporate statement signed by Adeyoola Temple, the Company Secretary, Sterling Bank revealed that the capital will be raised through the creation of a Shelf Programme, allowing the bank to issue financial instruments in tranches or series over a defined period.
“Sterling Bank has been authorized to raise up to $400 million or its equivalent in Naira or other currencies through instruments such as bonds, commercial papers, sukuks, debentures, medium or short-term notes, preference shares, ordinary shares, and global depositary receipts,” the statement read.
The issuance may occur via public offerings, private placements, rights issues, or any other approved mechanism. Pricing and interest rates will be determined through book building or other valuation methodologies, subject to regulatory approvals.
Expansion of Capital Structure and Regulatory Backing
To facilitate this capital mobilisation, the Board of Directors received an unconditional mandate citing 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 company’s share capital over a two-year window.
In the event of a rights issue, unclaimed shares may be offered to other shareholders who have expressed interest in acquiring additional equity, as determined by the Board.
Furthermore, Sterling Bank is empowered to seek listing and trading admission of the new securities on:
- Nigerian Exchange Limited (NGX)
- FMDQ Securities Exchange Limited
- Or any other domestic or international exchange deemed appropriate
Legal Amendments and Shareholder Actions
The Board has been authorized to amend the bank’s Memorandum and Articles of Association to reflect the new capital structure. The Company Secretary is tasked with registering all capital increases with the Corporate Affairs Commission (CAC) and implementing necessary filings across tranches.
Sterling Bank also confirmed it will engage professional advisers to navigate the legal, financial, and compliance requirements essential for executing the capital raise. This includes securing all relevant regulatory approvals and adhering to oversight from financial authorities.
“This move positions Sterling Bank for long-term expansion, strategic partnerships, and increased competitiveness in both local and international markets,” said a spokesperson close to the bank’s executive team.
What You Should Know
- In April, the bank unveiled a new policy, announcing that it would no longer charge fees on online transfers for all local transactions conducted through its mobile app, effective immediately.
- The announcement, initially made on their official X handle, stirred skepticism among the public due to its timing, coinciding with April Fools’ Day on April 1. Many assumed the zero-transfer-fee announcement was a marketing prank.
- By introducing this policy, Sterling Bank positions itself as a pioneer in prioritizing customer-centric banking practices.
