Fidelity Bank says its public offer recorded 237% oversubscription

Fidelity Bank Plc says it has concluded the first phase of its equity capital raise, recording a 237 percent oversubscription in its public offer.

The development comes after the verification of capital by the Central Bank of Nigeria (CBN) and the approval of the basis of allotment by the Securities and Exchange Commission (SEC).

On June 5, 2024, Fidelity Bank announced its readiness to raise a total of N127.1 billion through a rights issue to existing shareholders and a public offer.

The bank said N29.6 billion would be raised through the rights issue, while N97.5 billion would come from the public offer.

In a statement on Saturday, Fidelity Bank said it received a total of 108,046 applications for 23,791,687,463 ordinary shares valued at N231,968,952,764.25 on the public offer.

According to the bank, 107,588 applications for 23,768,724,000 ordinary shares totalling N231,745,059,000 were found to be valid based on the terms of the offer and the CBN’s verification; while 458 invalid applications for 22,765,143 shares amounting to N221,960,144.25 were rejected.

The financial institution said 548 applications containing odd lots of 198,320 shares (N1.93 million) were also rejected, noting that the public offer was 237 percent subscribed and 150 percent allotted.

“With respect to the Rights Issue, 7,559 applications for 4,430,290,237 Ordinary Shares totaling N40,980,184,692.25 were received of which 656 applications for 23,037,442 Ordinary Shares totaling N213,096,338.50 were invalid based on the terms of the Rights Issue. The Rights Issue was 137.73% subscribed and 100% allotted,” the statement reads.

Fidelity Bank said the positive result recorded in its combined offer is a testament to the strength of its franchise in the capital market.

“We are delighted to announce the successful completion of the first phase of our capital raising initiatives through a Public Offer and Rights Issue,” Fidelity Bank said.

“We extend sincere gratitude to our investors for their continued confidence in the Bank, as evidenced by the 237.92% and 137.73% oversubscription of our Public Offer and Rights Issue respectively.”

Although the bank’s statement was silent on the exact amount raised, TheCable understood that Fidelity Bank raised about N272 billion but only accepted N175.85 billion.

Nneka Onyeali-Ikpe, the managing director and chief executive officer (CEO) of Fidelity Bank, reaffirmed the bank’s commitment to delivering innovative financial solutions to its customers and ensuring sustainable returns for its stakeholders as the company moves into the next phase of its capital-raising efforts.

‘FUNDS REALISED WILL BE CHANNELLED INTO BUSINESS EXPANSION’

According to the statement, the bank plans to channel the funds realised into expanding its local and international business, enhancing technology infrastructure, and improving customer service.

Fidelity Bank announced that with the successful completion of the first phase of the capital-raising programme, its board of directors has secured shareholder approval to commence the second phase.

The company expressed confidence in meeting the CBN’s new capital requirement deadline of March 31, 2026.

The CBN, on March 29, 2024, announced an upward review of the minimum capital requirements for commercial, merchant, and non-interest banks.