Fidelity Bank Launches N127.1B Capital Raise with Rights Issue & Public Offer

By Jemimah Wellington, JKNMedia Reporter

SET TO OPEN its public offer and rights issue on Thursday, June 20, Fidelity Bank Plc, has disclosed its intentions to raise up to N127.1 billion, combining a rights issue for existing shareholders and a public offer for new investors.

Being Nigeria’s sixth-largest bank, it says the rights issue will offer 3.2 billion ordinary shares at 50 kobo each, priced at N9.25 per share, in a ratio of 1 new share for every 10 shares held as of January 5, 2024.

The public offer will present 10 billion ordinary shares at N9.75 per share to the general investing public.

The subscription period for both the rights issue and the public offer will run from June 20 to July 29, 2024.

This capital raise is part of Fidelity Bank’s strategy to increase its share capital base in compliance with the revised minimum capital requirements set by the Central Bank of Nigeria (CBN) on March 28, 2024.

Stanbic IBTC Capital is leading the issuance, supported by several joint issuing houses including Iron Global Markets Limited, Cowry Asset Management Limited, Afrinvest Capital Limited, and others.

To provide more details about this initiative, Fidelity Bank will host a “Facts Behind the Offer” presentation at the Nigerian Exchange Limited (NGX) on June 20.

The bank’s shareholders approved the rights issue and public offer at an Extra-Ordinary General Meeting held on August 11, 2023.

Nneka Onyeali-Ikpe, Managing Director and CEO of the bank stated that the funds raised will be used for investment in IT infrastructure, business and regional expansion, and enhancing product distribution channels.

Oladele Sotubo, CEO of Stanbic IBTC Capital, praised Fidelity Bank’s management for their commitment to meeting the CBN’s revised capital requirements and expressed confidence that this initiative would inspire other companies to tap into the equity capital markets for funding.

Fidelity Bank’s share price has shown impressive growth, rising from N1.68 per share in May 2019 to N10.20 per share by May 2024. This performance outpaced all major indices at the Nigerian stock market, with a 507.14 percent increase over five years, representing an average annual capital gain of 101.43 percent.

Investment analysts and research reports from firms like Afrinvest Group, FSDH Capital, and CardinalStone have consistently rated Fidelity Bank as a strong investment, predicting continued growth and attractive returns.

Recently, Fidelity Bank secured a $40-million Intra-African Investment Facility from African Export-Import Bank (Afreximbank) to support its acquisition and recapitalization of Union Bank UK, enhancing its international expansion strategy.

With a track record of substantial returns and strategic growth initiatives, Fidelity Bank remains a highly attractive investment option, offering significant long-term value and a hedge against inflation for investors.

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