Shareholders of Stanbic IBTC Holdings Plc have approved plans by the holding company to raise a total of N550 billion in new debt and equity capital, as the company seeks to meet the new minimum capital base prescribed by the Central Bank of Nigeria (CBN).
Regulatory filings at the weekend indicated that shareholders mandated the company to raise N150 billion through a rights issue or public offering and to set up a N400 billion debt issuance programme.
Stanbic IBTC Holdings’ flagship subsidiary, Stanbic IBTC Bank Limited needs about N91 billion new equity fund to meet the new minimum capital base of N200 billion required for its national banking licence. Stanbic IBTC currently has share capital and share premium of N109.25 billion. It however has shareholders’ funds of N506.924 billion.
The N150 billion new equity capital raising is expected to increase the share capital and share premium of the company to about N260 billion, above the new minimum capital requirement of N200 billion share capital and share premium for national bank.
Shareholders authorized the company “to raise additional equity capital of up to N150 billion by way of a rights issue or offer for subscription on such terms, tranches, conditions and dates as may be determined by the directors”.
Shareholders also granted waivers allowing the board to offer unsubscribed shares first to interested existing shareholders and later, if remaining, to interested investors on similar terms to the rights issue or offer for subscription.
The company also received shareholders’ approval to reaffirm a dividend conversion scheme under which shareholders may be permitted to elect to receive new ordinary shares in the company, credited as fully paid, instead of the whole or any part of any cash dividends declared by the company. Such authorisation for dividend conversion shall subsist until the earlier of five years from the date of the passing of the resolution and the date on which the annual general meeting of the company to be held in 2029 occurs.
Under the resolutions, directors were authorised to issue such new ordinary shares and make such allotments of shares or approve any allotment proposals as may be deemed necessary and expedient to give effect to the dividend conversion scheme, subject to obtaining the approvals of the relevant regulatory authorities.
Following the completion of the additional equity capital raise, the issued and paid up share capital of the company would be increased from N6.478 billion divided into 12.957 billion ordinary shares of 50 Kobo each to a maximum of up to N8.25 billion by the creation of up to 3.54 billion ordinary shares of 50 Kobo each.
Under the debt capital raising, shareholders authorized the board “to establish a debt issuance programme in an amount of up to N400 billion or such foreign currency equivalent thereof as the directors may consider appropriate, for the purpose of issuing debt securities-to include senior unsecured or secured, subordinated, convertible, preferred, equity linked or such other forms of debt obligations, by way of public offering, private placement, additional tier one or tier two capital raising, investments, book building process or any other method, in tranches of such amounts and at such dates, coupon or interest rates and upon such terms and conditions as may be determined by the directors, subject to the grant of all required approvals from the relevant regulatory authorities”.
