Fidelity Bank to raise N32bn via rights issue

Fidelity Bank Plc has submitted an application for approval and the subsequent listing of a Rights Issue, consisting of 3.2 billion ordinary shares with a face value of 50 kobo each, at a rate of N10 per share on the Nigerian Exchange Limited (NGX). If granted approval, this Rights Issue is expected to generate approximately N32 billion from the bank's existing shareholders.

According to the NGX's weekly report, Fidelity Bank pursued this approval through its Stockbrokers, APT Securities & Funds Limited. The proposed Rights Issue is structured on the basis of offering one new ordinary share for every ten existing ordinary shares held as of the close of business on Friday, January 5, 2024, which serves as the qualification date for the Rights Issue.

Earlier, on August 11, 2023, the NGX had listed 3,037,414,308 ordinary shares of Fidelity Bank at a rate of N4.60 per share through a Private Placement, resulting in a total valuation of approximately N13.972 billion.

Fidelity Bank had previously disclosed plans to bolster its capital through a combination of public offerings and a Rights Issue, involving the issuance of 13,200 billion ordinary shares. The bank's statement indicated that the current issued share capital of N16 billion, comprised of 32 billion ordinary shares with a face value of N0.50 each, would be expanded to N22.6 billion by creating up to 13,200 billion additional ordinary shares.

This decision to augment its capital base preceded the announcement of the planned recapitalization exercise for banks by the Governor of the Central Bank of Nigeria, Dr. Olayemi Cardoso, during the Annual Bankers' Dinner in Lagos. Subsequent to this announcement, there has been heightened activity in banking stocks on the local bourse.

As of the latest trading day, Fidelity Bank closed on the NGX at N14.2 per unit, reflecting a 6.36% increase over the previous day's closing price. Additionally, this closing price represented the highest value for the equity in the past seven days.