Zenith Bank set to raise N290bn in rights issue, public offer

Business a.m.

 R – L: Louis Odom, executive director, Zenith Bank Plc; Akin Ogunranti, executive director; Chuka Eseka, managing director/chief executive, Vetiva Advisory Ltd;Adaora Umeoji,group managing director/chief executive, Zenith Bank Plc; Wole Abegunde, group managing director, Meristem Securities Ltd; Micheal Otu, company secretary;Oyindamola Akinyemi, executive director, Stanbic IBTC Capital Limited;Henry Oroh, executive director; Adobi Nwapa, executive director; and Adamu Lawani, executive director, during the Zenith Bank capital raising signing ceremony at the Civic Centre, Victoria Island, Lagos, recently.

Zenith Bank Plc has announced its intention to raise a total of N290 billion through a dual funding approach involving a rights issue and a public offer. The capital raise is expected to fortify the bank’s capital base, enabling it to meet the new capital adequacy ratio requirements introduced by the Central Bank of Nigeria (CBN) and maintain its position as a leading financial institution in Nigeria.

The Zenith Bank rights issue/public offer signing ceremony, which took place recently at the Civic Centre in Victoria Island, Lagos, formally initiated the bank’s capital-raising program. The event follows the bank’s earlier declaration of its plans to raise capital through a rights issue and public offer, aimed at enhancing its capital base and providing necessary support for its expansion across its banking and non-banking subsidiaries.

Zenith Bank’s rights Issue and offer for subscription, designed to shore up its capital base, provide existing shareholders with the chance to purchase additional shares proportional to their current holdings. The rights issue is offering 5,232,748,964 ordinary shares  of 50 Kobo each at N36.00 per share, while the offer for subscription presents 2,767,251,036 ordinary shares at N36.50 per share.

The rights issue provides its existing shareholders with the opportunity to acquire additional shares in direct proportion to their current holdings. This offer, available to eligible shareholders as of Wednesday, July 24, 2024, entails an allocation of one new ordinary share for every six existing ordinary shares held. 

Speaking at the signing ceremony, Adaora Umeoji, the group managing director/CEO of Zenith Bank Plc, expressed her excitement regarding the bank’s capital-raising programme. She highlighted the fact that the transaction documents signed for Zenith Bank’s N290 billion rights issue and public offer surpass the N230 billion required by the CBN for the bank to comply with its minimum recapitalisation requirements.

“We are extremely pleased with the level of enthusiasm we have already seen from our existing shareholders for the Rights Issue. Beyond existing

shareholders, incorporating a public offer is crucial to ensure that our customers, who are not yet shareholders, can have the opportunity to join in the ownership of this premium brand,” she stated.

Umeoji highlighted Zenith Bank’s accomplishments in the field of Tier-1 capital, noting that the bank has been recognised by The Banker, a publication of Financial Times, as the number one bank in Nigeria in this category and the only Nigerian bank to feature in the top 600 banks globally.

The group MD noted further:  “Specifically, in the last five years, we have maintained the record as the highest dividend-paying Bank in Nigeria. In 2023, we set a record as the only Nigerian Bank to pay a dividend of N4 per share.” 

Umeoji stated that the funds generated from the rights issue and public offer would be allocated towards strategic initiatives, including expanding Zenith Bank’s operations in Africa and internationally, bolstering the bank’s technological infrastructure to ensure it remains at the forefront of innovation, and supporting working capital requirements on an ongoing basis.

She also acknowledged the bank’s founder and chairman, Jim Ovia, whose vision and leadership over the past 34 years have been instrumental in shaping Zenith Bank into the reputable, dominant, and globally recognised financial institution it is today.

Oladele Sotubo,chief executive officer, Stanbic IBTC Capital Limited, congratulated Zenith Bank’s management for their commitment to the capital-raising transaction. According to Sotubo, this initiative provides a unique opportunity for existing shareholders to reinforce their positions in the bank and welcomes new investors to join Zenith Bank on its journey towards a promising future.

Sotubo expressed his gratitude for the opportunity that was afforded to Stanbic IBTC Capital Limited to lead and guide Zenith Bank in the execution of the rights issue and public offer.

Speaking further, he said, “A combined offer that is both a Rights Issue and a Public Offer confirms Zenith Bank’s position as a pacesetter and a role model, which will undoubtedly spur more transactions in the capital market.”

The rights issue and public offer is being managed by a consortium of leading financial institutions, with Stanbic IBTC Capital Limited serving as the lead issuing house. Other joint issuing houses include Quantum Zenith Capital & Investments Limited, CardinalStone Partners Limited, Meristem Capital Limited, Chapel Hill Denham Advisory Limited, Coronation Merchant Bank Limited, and Vetiva Advisory Services Limited.

The offer will commence on Thursday, August 1, 2024, and remain open for investors to participate until Monday, September 9, 2024.

To ensure a seamless and convenient application process for the rights issue and public offer, Zenith Bank has made available a comprehensive range of channels for investors to utilize. The bank has enabled the application process through its digital platforms, including Zenith Bank Internet Banking, Zenith Bank Mobile Application, and Zenith Bank Corporate Internet Banking.

In addition, investors can visit any of the bank’s branches across the nation, or utilise the NGX Invest platform.

Zenith Bank has integrated its e-Application channels into the NGX Invest platform, which can be accessed at https://invest.ngxgroup.com, providing a one-stop-shop for investors and authorized receiving agents to submit applications with ease.

By leveraging the power of digital technology, the bank has democratised the distribution of public offers and rights issues, making it easier and more accessible for investors to participate in the capital market.