FCMB rolls out N110 billion public offer, commits to SMEs lending

FCMB Group Plc has stated that the N110.9 billion public offer would expand its business activities and boost lending to key sectors, especially agriculture, SMEs, and non-oil exports.

According to the bank, these sectors would help the country to achieve sustainable growth and create more jobs for the people. The bank, yesterday, launched its public offer seeking to raise N110.9 billion additional capital through the issuance of 15.197 billion shares at N7.30 per share.This move is part of the bank’s comprehensive plan to meet the Central Bank of Nigeria’s (CBN) capitalisation requirements.

Group Chief Executive Officer, Ladi Balogun, during its ‘Facts Behind the Offer’ Presentation at the Nigerian Exchange (NGX) yesterday, stated 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.

Balogun stated the first phase was aimed at generating N150 billion through a public offer of 15.12 billion shares at N7.30 totaling N110.9 billion. According to him, another private placement of about $40 million to $50 million, which will close by the end of the year and convertible by next year, would also be executed.

Balogun added that the public offer will enable the bank to swiftly meet market demands while ensuring simplicity and speed in its execution. For the second phase, he said it would involve selling minority interests in one or two of its subsidiaries, with the aim of raising between N80 to N100 billion, bringing the total capital raised to approximately N250 billion.

“By selling minority stakes, we avoid over-diluting our shareholders and recognize the undervalued potential of our subsidiaries,” Balogun explained. According to him, the final phase, set for the end of 2025, will involve a private placement with identified potential investors.

“FCMB aims to complete all phases with less than 50 billion shares in issue, targeting around 45 billion. Our goal is to ensure we sustain and grow earnings per share for our investors despite the significant share issuance,” he said.

Balogun said the proceeds from this capital raise will primarily drive business growth, focusing on lending to key sectors such as agriculture, SMEs, and non-oil exports.

Additionally, he pointed out that the bank’s investments in technology will bolster cybersecurity, enhance service quality, and reduce both financial and environmental costs.

He noted that significant funds will also be allocated to human capital development, ensuring a robust leadership culture within the organization, according to him.

Explaining the bank’s choice of public offering, Balogun noted that it would help enhance speed and simplicity in execution, noting that the decision to sell stakes in subsidiaries was also strategic to allow the bank to maintain its control while injecting capital into the bank without excessive dilution.

On his part, the Chief Executive Officer of NGX, Jude Chiemeka, expressed optimism on the success of the capital raising exercise. He urged stakeholders and potential investors to leverage the NGX Invest platform to ensure seamless participation in the public offer.

“We have continued to deploy technology to drive a digital Exchange while making onboarding hassle-free for every investor. There is a whole demographic of young investors out there who can leverage our digital platform to partake in this offer and become part of the NGX family.”