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First Bank set to raise N100bn

Posted by By SEUN ADESIDA on 2007/03/20 | Views: 1074 |

First Bank set to raise N100bn

Shareholders of First Bank Nigeria Plc have approved the proposal for a hybrid offer of N100billion to be raised from the capital market.

Shareholders of First Bank Nigeria Plc have approved the proposal for a hybrid offer of N100billion to be raised from the capital market. The offer, which is the highest in Nigeria’s banking history, is a combination of right issue and public offer and was presented to the shareholders at an Extraordinary General Meeting (EGM) in Lagos on Monday.

While presenting the proposal, chairman of the bank, Alhaji Umaru Mutalab, said that First Bank was making the offer to meet up with post-consolidation challenges that will further reposition it as the truly first bank in Nigeria.

In his address at the EGM, the bank’s managing director, Jacobs Ajekigbe said: "This proposed offer is driven by our vision to remain the first in the banking industry, as well as to aid the speedy deployment and modernisation of our processes and operations.

The offer will afford the bank the opportunity to expand the bank’s present network of branches and in modernising the old ones in terms of aesthetics and ambience. We are equally going to upgrade our IT platform and accelerate all areas of our business growth. We are equally going to recapitalise all our existing subsidiaries in order to meet up with our new vision and goal."

While reacting to the issue of the proposed merger with Ecobank Transnational Incorporated, Ajekigbe said: "Our proposed merger with Ecobank is a challenging proposal. We have not called it off, but we will get the best for FBN. And beyond Ecobank, there are other opportunities even beyond Nigeria for merger and acquisition. Let me say clearly that merger is not an issue of contest."

Speaking on the pricing, he said the board of directors would, at the appropriate time, decide on going price for the upcoming jumbo offer. He assured the shareholders that the price would be reasonable. He said that the timing for the offer was right, adding: "We believe in Nigeria, that the election will be held and it will come and go and business will continue as usual. We are going to run parallel campaign. As the politicians are campaigning for votes, FBN will be campaigning for money."

Alluding the right timing of the offer to the sustained rating by Fitch Rating Agency, the FBN boss said: "Ficth rating for the country has been sustained above the BB-rating and that indicates vote of confidence in the economy. If this is so, then we have no problem about timing and I and the board feel the timing is right."

He used the opportunity to correct the impression that the bank invested heavily in Transcorp, saying that the bank had holdings through its subsidiaries in the conglomerate.
Responding to the proposed offer, the majority of the shareholders were upbeat about the success while expressing their observations.

According to National Coordinator of Nigeria Shareholders Association, Prince Sunny Nwosu, "the bank should look beyond Ecobank and consolidate the merger, if FBN wants to remain in the forefront of the banking industry in Nigeria."
On the timing, he appealed to the board of directors to consider a right time so that shareholders can benefit from the offer.

Chief Akintunde Asalu said: "It is regrettable that Ecobank wants to upstage First Bank. This N100billion offer is the real jumbo offer, but my fear is that it will be oversubscribed."
Umaru Farouk, on his part, appealed to the management of the bank not to short-change the shareholders, especially in the area of bonus to existing shareholders. This, according to him, was more so as the price of the stock may hit an all time high of N60 next year.

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