Recapitalisation: Zenith Bank to raise N290bn via public offer, rights issue
Zenith Bank Plc has unveiled plans to raise N290 billion through a combination of a Rights Issue and a Public Offer, in adherence to the revised minimum capital requirements stipulated by the Central Bank of Nigeria (CBN).
The announcement came during the Zenith Bank Rights Issue/Public Offer Signing Ceremony held on Monday, July 29, 2024, at The Civic Centre, Victoria Island, Lagos, marking a significant milestone in the bank’s ongoing capital-raising initiative aimed at fortifying its capital base and supporting its growth strategy across banking and non-banking subsidiaries.
The Rights Issue involves the offering of 5,232,748,964 ordinary shares of 50 Kobo each at a price of N36.00 per share. Concurrently, the Offer for Subscription comprises 2,767,251,036 ordinary shares of the same denomination at N36.50 per share. Existing shareholders will have the opportunity to acquire additional shares based on a ratio of one new ordinary share for every six existing shares held as of Wednesday, July 24, 2024. On the other hand, the Public Offer targets new investors seeking to participate in Zenith Bank’s growth trajectory.
Group Managing Director/CEO of Zenith Bank Plc, Dame (Dr.) Adaora Umeoji, OON, expressed optimism during the signing ceremony, stating, “Today, we have finalised the transaction documents for Zenith Bank’s N290 billion Rights Issue and Public Offer. This amount exceeds the N230 billion required to meet the CBN’s minimum recapitalisation threshold. We are particularly pleased with the enthusiastic response from our current shareholders towards the Rights Issue. In addition to existing shareholders, incorporating a public offer is essential to enable our customers who are not yet shareholders to become part owners of our esteemed brand.”
She highlighted Zenith Bank’s distinguished position in Tier-1 Capital, noting accolades such as being ranked the top Nigerian bank by The Banker, Financial Times, and the only Nigerian bank listed among the top 600 globally. She underscored the bank’s commitment to shareholder value, citing its track record as the highest dividend-paying bank in Nigeria over the past five years, including a historic dividend payout of N4 per share in 2023.
The proceeds from the capital raise will be allocated towards expanding banking operations across Africa and internationally, enhancing technology infrastructure, and supporting ongoing working capital needs. Dame Adaora assured prospective investors of Zenith Bank’s dedication to maintaining leadership in dividend payouts and urged them to consider investing in the bank’s enduring value proposition.
Acknowledging the foundational vision of Founder and Chairman, Dr. Jim Ovia CFR, spanning over three decades, expressed profound gratitude for his leadership in establishing Zenith Bank as a globally recognised institution renowned for innovation and superior performance.
Chief Executive of Stanbic IBTC Capital Limited, the lead issuing house, Mr. Oladele Sotubo, commended Zenith Bank’s management for their commitment to the transaction. He emphasised the combined offering of Rights Issue and Public Offer as a testament to Zenith Bank’s pioneering role in setting market standards and driving capital market transactions.
The Rights Issue and Public Offer, managed by Stanbic IBTC Capital Limited as lead issuing house, alongside 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, will open for subscription on Thursday, August 1, 2024, and close on Monday, September 9, 2024.
Zenith Bank has established multiple electronic platforms for convenient participation in the Rights Issue and Public Offer, including Zenith Bank Internet Banking, Zenith Bank Mobile Application, Zenith Bank Corporate Internet Banking, Zenith Bank Branches nationwide, and the NGX Invest platform accessible at https://invest.ngxgroup.com. These channels aim to democratise access to public offers and rights issues, enabling investors to subscribe effortlessly.
The unveiling of Zenith Bank’s ambitious capital raise underscores its commitment to sustaining growth momentum and enhancing shareholder value amidst evolving market dynamics.
