FCMB group launches N110.9bn capital raise via public offer

FCMB Group PLC has launched its public offer seeking to raise N110.9 billion in additional capital through the issuance of 15.197 billion shares at N7.30 per share.

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

The Group CEO, Ladi Balogun, during its “Facts Behind the Offer” presentation at the Nigerian Exchange (NGX) on Tuesday, noted that in addition to its public offer, the Group has adopted a three-phased approach to raise up to N397 billion in additional capital to drive its diversification plans, including incorporating a Technology Holding Company by 2026.

Balogun stated, “The first phase aims to generate N150 billion through a public offer of 15.12 billion shares at N7.30, totaling N110.9 billion. Additionally, a private placement of about $40 million to $50 million will close by the end of the year and be convertible by next year. The public offer will enable us to swiftly meet market demands while ensuring simplicity and speed in execution.”

He added that the second phase involves 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,” Balogun noted.

“We believe these sectors are vital for Nigeria’s development,” Balogun said. Additionally, investments in technology will bolster cybersecurity, enhance service quality, and reduce both financial and environmental costs. Significant funds will also be allocated to human capital development, ensuring a robust leadership pipeline within the organization, according to him.

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Explaining why they opted for a public offering over a rights issue, Balogun emphasized the need for speed and simplicity. He added that the decision to sell stakes in subsidiaries was also strategic, allowing FCMB to maintain control while injecting capital into the bank without excessive dilution.

This strategic move is part of the bank’s comprehensive plan to meet the Central Bank of Nigeria’s (CBN) capitalization requirements.

The CEO of NGX, Jude Chiemeka, at the event, expressed confidence that FCMB would be successful in its capital-raising plans.

He noted the efforts of the Exchange in ensuring a seamless process and urged stakeholders and potential investors to leverage the NGX Invest platform to partake in the public offer.

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