This information was shared via a notice on the Nigerian Exchange (NGX) disclosure page, which was signed by the company’s secretary, Mrs. Olufunmilayo Adedibu.
In the announcement, the group indicated its intention to obtain board approval at the AGM for the divestment of a portion of its stakes in one or more subsidiaries, with the generated funds earmarked for reinvestment into First City Monument Bank Limited (FCMB).
The notice indicated that the additional capital could be generated through the issuance of securities, contingent upon receiving the necessary approvals from relevant regulatory bodies.
Additionally, the board is requesting shareholder consent to divest a portion of the Company’s stake in one or more subsidiaries as deemed appropriate.
The objective is to invest a portion of the proceeds from these divestments into First City Monument Bank Limited, as part of the strategy to achieve its capital raising goals.
FCMB is also seeking approval to raise up to US$15 million or its equivalent in Nigerian Naira through a mandatory convertible loan targeted at a select group of qualified investors.
The group stated that the mandatory convertible loan, along with any accrued interest, would be converted into ordinary shares of the Company under specified terms and conditions.
The group noted, “At the 11th Annual General Meeting held on May 24, 2024, shareholders approved a capital raise plan of up to N150 billion and the creation of an additional 19,802,710,781 ordinary shares to increase the company’s share capital.
“As an initial step in implementing the Group’s capital raise strategy, a public offer was launched to raise up to N110 billion, which closed on September 4, 2024, and is currently under regulatory review.”
The proposal, informed by insights from the Issuing Houses and pending regulatory approvals, experienced significant oversubscription, indicating strong interest from a diverse range of investors.
This oversubscription is a testament to the solid confidence investors have in the Group, highlighting its impressive performance over recent years and its considerable growth prospects.
FCMB has informed its shareholders that, in response to the expected oversubscription of the public offering and to facilitate the next steps in the Group’s capital raising strategy, the Directors have recommended increasing the capital raise target from a maximum of N150 billion to N340 billion.
This decision aims to fully meet the capital requirements of FCMB Limited in accordance with the Central Bank of Nigeria’s updated capital standards.
The bank intends to capitalize on the heightened investor interest by accepting excess funds from the oversubscription of the public offering, contingent upon necessary regulatory approvals, and to enhance the Group’s share capital through the issuance of additional ordinary shares needed to reach the N340 billion target.
In addition, the Board of Directors has proposed a convertible loan of up to US$15,000,000 to protect shareholder returns while capitalizing on the momentum generated by the public offering.
Funds obtained from select investors will automatically convert into common equity on a predetermined future date.
The Group has informed shareholders that opting for a convertible loan instead of a direct equity capital raise, such as the recently concluded public offering, ensures that no new ordinary shares will be issued.
Earlier this year, on March 28, 2024, the Central Bank of Nigeria (CBN) raised the capital requirements for banks, including FCMB, with a compliance deadline established for March 31, 2026.
At the Annual General Meeting (AGM) held on May 24, 2024, shareholders approved a plan to raise as much as N150 billion in capital. FCMB's public offering, a crucial part of this capital-raising initiative, concluded on September 4, 2024, and was met with significant demand, reflecting strong investor interest.
In the fourth quarter of 2024, FCMB's board of directors is proposing to increase the capital target to N340 billion to align with the CBN's recapitalization mandates. If the proposed resolutions are approved at the AGM scheduled for December 19, 2024, it could generate positive market sentiment and potentially boost FCMB's stock performance. Currently, FCMB's stock is on a long-term upward trajectory, trading at N9.25.