Ecobank Plans to Raise $3 Billion New Capital
Shareholders of Ecobank Transnational Incorporated (ETI) has given its directors authority to raise $3 billion (N348 billion) to boost the working capital of the group. .
The shareholders at the bank’s Annual General Meeting (AGM) held last Friday in Accra, Ghana gave the approval for the directors to raise the $3.0 billion in equity, debt quasi equity, Global Depository Receipts (GDR) or a combination of any or all of these forms of capital.
They however placed restrictions that 40 percent of any equity raised shall first be offered to existing shareholders by way of rights issue and the remaining 60 percent as well as any rights not taken up shall be offered by way of public offer with such preferential allotment as the board of directors may deem appropriate.
Chairman of ETI, Mande Sidibe, at the AGM said the board would determine the modalities including pricing and timing for the capital raising exercise. He also noted that some element of transparency had to be introduced so as to forestall any forceful takeover bids by investors.
“Central banks of almost all the countries in which we operate has raised the capital base of banks. With the entry of better banks in these countries, there is need to have adequate capital to fine-tune our operations in the next three years”, he explained.
The shareholders also authorised the board to adopt appropriate amendments to the bank’s Article 8(10) of the company’s articles of association, after approval of the regulatory authorities of the stock markets on which the bank’s share are listed.
The bank’s shares are listed on the Nigerian, Ghana , and Cote ’d Ivoire Stock Exchanges.
Another resolution passed at the AGM was the sub-division of the banks shares. The bank has resolved to reduce the nominal value of ordinary shares from 12.5 US Cents to 2.5 US Cents per share by dividing each ordinary share into 5 equal points.
Consequently meeting authorized the replacement of all existing shares and share certificates held by any shareholder of the company with the new shares and share certificate or the registration of the new shares into any share account reflecting the new nominal value of the shares, as appropriate.
Explaining the bank’s decision to split the company shares, Sidibe said it would enhance the liquidity and nominal value of the bank’s shares
“The decision to split the company’s shares is because share prices may be too high particularly at the Nigerian Stock Exchange (NSE) where trading of shares is most active. Therefore splitting will enhance liquidity and nominal value of our shares,” he said.
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