Zenith Bank Plc has announced plans to raise approximately N290 billion in fresh capital, surpassing the N230 billion required by the Central Bank of Nigeria (CBN) for its new recapitalisation mandate.
The announcement was made at the bank’s rights issue and public offer signing ceremony held on Monday in Lagos. According to Zenith Bank, the capital raise will be a mix of a rights issue and a public offer.
The rights issue will involve offering 5,232,748,964 ordinary shares of 50 Kobo each at N36.00 per share to existing shareholders, while the public offer will present 2,767,251,036 ordinary shares of 50 Kobo each at N36.50 per share to new investors. Existing shareholders will have the opportunity to purchase additional shares in proportion to their current holdings, based on one new ordinary share for every six existing shares held as of July 24, 2024.
The public offer is open to the general public and aims to attract new investors. Dr. Adaora Umeoji, Group Managing Director and CEO of Zenith Bank Plc, expressed enthusiasm about the initiative, stating, “We are extremely pleased with the level of enthusiasm we have already seen from our existing shareholders for the Rights Issue. Incorporating a public offer is crucial to ensure that our customers, who are not yet shareholders, can have the opportunity to join in the ownership of this premium brand.”
Dr. Umeoji highlighted Zenith Bank’s standing in the financial sector, noting, “Zenith Bank has been adjudged by The Banker, Financial Times to be number one in Nigeria in terms of tier-1 capital and the only Nigerian bank in the top 600 banks globally. Over the years, we have consistently rewarded our esteemed shareholders, and in 2023, we set a record as the only Nigerian bank to pay a dividend of N4 per share.”
The proceeds from the capital raise will be directed towards expanding banking operations across Africa and internationally, investing in technology infrastructure, and supporting ongoing working capital needs.
Mr. Oladele Sotubo, Chief Executive of Stanbic IBTC Capital Limited, commended Zenith Bank’s management for their commitment to the transaction, stating, “A combined offer that is both a rights issue and a public offer confirms Zenith Bank’s position as a pacesetter and a role model, which will undoubtedly spur more transactions in the capital market.”
Stanbic IBTC Capital Limited is leading the issuance of the rights issue and public offer, with support from 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.
The offer will open on August 1, 2024, and close on September 9, 2024.
This move comes in response to the CBN’s directive for Deposit Money Banks to recapitalise. According to the CBN’s recapitalisation circular, commercial banks with international authorisation must increase their capital base to N500 billion, national banks to N200 billion, and regional banks to N50 billion. Non-interest banks with national and regional authorisations are required to raise their capital to N20 billion and N10 billion, respectively. The banks are to meet these requirements by March 31, 2026, through raising additional capital, mergers and acquisitions, or licence changes.
