FCMB Group to raise N397bn in three phases

FCMB Group Plc says it plans to raise N397 billion in three phases ahead of the Central Bank of Nigeria (CBN) recapitalisation exercise. Ladi Balogun, FCMB Group CEO, said this at the ‘Fact Behind The Offer’ presentation of the group to capital market stakeholders at the Nigerian Exchange Ltd. (NGX) on Tuesday in Lagos. Mr Balogun said the group on Monday launched a public offer of 15,197,289,219 ordinary shares at 50k each at N7.30 per share, aiming to raise N110 billion in gross proceeds. He also noted that alongside the public offer, the group was conducting a private placement of $40 million to $50 million, which would close by the end of the year and convert to ordinary shares by 2025.

According to him, in 2025, the group will sell a minority stake in its pension and credit direct businesses to raise at least N90 billion, which will be injected into its bank subsidiary. Mr Balogun said, “Towards the end of 2025, we are already in discussions with several offshore development finance institutions for a private placement. This will be in the form of a preference share in the holding company and downstream as equity into the bank. That will be the final phase for us to meet the N397 billion total we are raising.” According to him, if the plan proceeds as expected, there will be no need to issue more ordinary shares at the holding company level to meet the CBN’s N500 billion benchmark. Mr Balogun emphasised that the public offer was likely to be the only one the group would undertake to meet the capital requirements for its banking subsidiary.

The CEO stated that the purpose of the offer was to support the recapitalisation effort and meet the minimum requirement for its international license. He said that the proceeds raised would be used to drive business growth, invest in technology and human capital, and support key sectors of the economy such as agriculture, SMEs, and non-oil exports. “With the additional capital, we will be able to continue our lending to key sectors of the economy, such as agriculture, SMEs, non-oil exports and the like, which are key for the development of Nigeria. We will also invest in technology to strengthen our cyber security and offer better quality of service to our customers. The fund generated will also help us reduce our own cost of doing business and not just our own financial cost, but our cost to the planet in terms of carbon footprint,” he explained. Mr Balogun predicted that FCMB Group’s Before Tax (PBT) and earnings would witness a 50 per cent growth rate Year-on-Year per annum following the additional capital raise.

Mr Balogun also mentioned that the group chose a public offer for its speed and simplicity, as a combined offer of a rights issue and a public offer would have delayed the firm’s approach to the capital market. Temi Popoola, group chief executive officer of the Nigerian Exchange Group, highlighted that since the start of the recapitalisation process, the NGX had embraced digital solutions that enhance efficiency and transparency. Jude Chiemeka, NGX CEO, added that the Exchange was committed to providing financial education to investors, empowering them to make informed decisions and navigate the market effectively. Mr Chiemeka noted that the NGX had established a system that allows investors to access instruments with measurable environmental, social, and governance impacts that contribute to the green economy. (NAN)