Fidelity Bank Launches N127.1 Billion Public Offer and Rights Issue to Expand Capital Base
Fidelity Bank Plc, Nigeria's sixth-largest bank, is set to launch a substantial fundraising initiative with the opening of its public offer and rights issue on Thursday, June 20. The bank aims to raise up to N127.1 billion through a combination of rights issue to existing shareholders and a public offer to the general investing public.
The rights issue will see 3.2 billion ordinary shares of 50 kobo each offered at N9.25 per share in the ratio of 1 new share for every 10 shares held as of January 5, 2024. Concurrently, the public offer will make available 10 billion ordinary shares at N9.75 per share. Both offers will be open from June 20 to July 29, 2024.
This combined offer is part of Fidelity Bank's strategy to meet the revised minimum capital requirements for Nigerian commercial banks set by the Central Bank of Nigeria (CBN) in March 2024. Stanbic IBTC Capital is leading the issuance, with support from several joint issuing houses including Iron Global Markets Limited and Afrinvest Capital Limited.
At the signing ceremony, Nneka Onyeali-Ikpe, Managing Director and CEO of Fidelity Bank, emphasized that the proceeds will fund investments in IT infrastructure, business expansion, and product distribution channels. Oladele Sotubo, CEO of Stanbic IBTC Capital, praised Fidelity Bank’s proactive approach to capital requirements and expressed confidence in the market’s positive response to the offer.
Fidelity Bank’s shares have demonstrated impressive performance, rising from N1.68 per share in May 2019 to N10.20 per share by May 2024. Analysts, including those from Afrinvest Group and FSDH Capital, have recommended the bank's stock as a "BUY," citing its strong historical and current operational performance and strategic growth plans.
Moreover, Fidelity Bank's recent acquisition of Union Bank UK, supported by a $40-million facility from Afreximbank, underscores its international expansion efforts. This acquisition aims to establish a new pan-African financial institution providing correspondent and offshore banking services.
With a remarkable five-year capital gain of 507.14%, Fidelity Bank has outperformed major market indices, offering an average annual return of 101.43%. This performance highlights the bank as a prime investment choice, particularly in an inflationary environment.
The public offer and rights issue reflect Fidelity Bank's commitment to strengthening its capital base, driving sustained growth, and providing substantial returns to its investors.
Iheanyi Nwachukwu
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