FBN Holdings revises Rights Issue to N25 per share, targets N350bn capital raise

FBN Holdings Plc has revised its proposed Rights Issue, submitting a fresh application to the Nigerian Exchange Limited (NGX) for approval. The updated proposal involves issuing 5.98 billion ordinary shares of 50 kobo each at N25 per share, replacing the previous plan to issue 8.97 billion shares at N15.50 per share.

This new offer is structured as 1 new ordinary share for every 6 shares held, with a qualification date set for October 18, 2024.

The revision comes after the initial Rights Issue was suspended following a court injunction by an aggrieved shareholder. However, FBN Holdings has now received the necessary clearance to proceed with its capital-raising efforts.

The upcoming 12th Annual General Meeting (AGM), scheduled for November 14, 2024, will see this revised Rights Issue as a key agenda item.

In addition to the Rights Issue, shareholders will vote on the company’s plan to raise N350 billion, a substantial increase from the earlier target of N150 billion.

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This capital boost will provide FBN Holdings with flexibility to pursue growth opportunities across its business units, through methods such as rights issues, public offerings, or private placements.

Analysts view the revised Rights Issue and the larger capital raise as a strategic recalibration.

Financial analyst Bayo Akinlabi commented, “By raising the price to N25 per share, FBN Holdings is signaling confidence in its valuation and long-term growth prospects. This premium offer is a positive signal to the market that the company aims to bolster its capital base to execute its strategic initiatives more robustly.”

The capital raise is part of a broader strategy to strengthen the company’s balance sheet and position it for sustained growth. The plan to raise N350 billion follows a previous goal of N300 billion, which was paused in April 2024 due to legal complications.

With the AGM now providing an opportunity for shareholder approval, the company is positioning itself for financial stability amidst a changing market environment.

Additionally, the AGM will include discussions on the election of new directors, notably the ratification of Adebowale Oyedeji as Group Managing Director, effective November 13, 2024.

Mr. Oyedeji’s appointment is seen as a move to consolidate leadership as FBN Holdings continues to navigate both internal restructuring and external market pressures.

Pending approvals from NGX and shareholders, investors are watching closely to gauge how this capital raise will impact FBN Holdings’ financial strength and its ability to execute its long-term growth objectives.