FCMB Group Shareholders Approve N340bn Capital Raise

FCMB Group Plc has secured shareholders’ approval for a N340 billion capital raise.

The approval, granted during an extraordinary general meeting held both physical and virtual in Lagos, is crucial for its banking subsidiary, First City Monument Bank Limited, to comply with the Central Bank of Nigeria’s international license requirements.

The approved measures include increasing the authorized additional capital raise from N150 billion to N340 billion, which empowers the Group to explore a diverse mix of financial instruments, such as ordinary and preference shares, convertible and non-convertible securities, bonds, and loans.

Shareholders also endorsed the divestment of stakes in one or more subsidiaries, with proceeds earmarked for reinvestment in the banking subsidiary, and the acceptance of surplus funds arising from oversubscription of the public offer launched in July 2024, subject to regulatory approvals.

Additionally, the meeting approved an increase in the company’s issued share capital from N19.8 billion divided in 39.6 billion ordinary shares of 50 kobo each while authorizing the raise of up to $15 million (or its Naira equivalent) via a mandatory convertible loan targeted at select qualified investors.

Ladi Balogun, the group chief executive officer of FCMB Group, said, this is a critical milestone, emphasizing shareholder confidence in FCMB Group’s strategic direction.

FCMB Group reported a 67 per cent growth in nine-month profit before tax to N91.8 billion as at September 40, 2024.

An earlier capital raise in September was oversubscribed, showing investor confidence in the Company’s growth prospects.

Shareholders expressed confidence in the company’s trajectory, applauding its ability to generate robust returns and exceed expectations.

It will be recalled that in July 2024 FCMB Group raised N110.9 billion capital raised via public offer in enhancing its capital base and strategic business expansion growth.

The Group via public offer issued 15.197 billion shares at N7.30 per share, amounting to N110.9 billion on July 29, 2024 and closed on September 4, 2024.

Balogun earlier said that this strategic move is part of the bank’s comprehensive plan to meet the Central Bank of Nigeria’s (CBN) capitalisation requirements, saying that in addition to its public offer, the Group has adopted a three-phased approach to raise up to N397 billion additional capital to drive its diversification plans including incorporating a Technology Holding Company by 2026.

He stated that “the first phase, which aims to generate N150 billion through a public offer of 15.12 billion shares at N7.30 totaling N110.9 billion. Also, a private placement of about $40 million to $50 million which will close by the end of the year and convertible by next year. The public offer will enable us to swiftly meet market demands while ensuring simplicity and speed in execution.”

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