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Zenith Bank to raise N300bn fresh capital

By Peter Egwuatu
Zenith Bank Plc is proposing to raise N300 billion fresh capital from the capital market to consolidate and reposition itself following the ongoing reforms in the banking industry.

According to a statement published in a national daily, the bank would be seeking approval to raise fresh capital of up to N300 billion naira ($2 billion) at an extraordinary general meeting on October 30,2009.

The bank said in a notice that it would seek approval to raise the funds by issuing debt or equity but gave no details on what the funds would be used for.

The fund raising if approved by shareholders will be the fourth to be raised from the Nigerian capital market since it became a public company in 2004.

It would be recalled that Zenith Bank in 2004 issued its Initial Public Offering (IPO) at N10.90 per share and raised about N48 billion, regarded then as the highest amount to have raised in the Nigerian capital market given the period under consideration. But for regulatory provision it could not absorbed all the money raised but retained about N36 billion.

In the second public offering in 2006, Zenith Bank raised about N50.7 billion at an offer price of N16.90 per share. The bank had offered offer for subscription of 1,763,000,000 ordinary shares of 50k each at N38.90k and a rights issue of 1,654,557,911 units at N36.90k. Tthe offer which opened on Thursday, December 6th, 2007 closed  January 17, 2008.

The company recorded a profit after tax of N 20.29 billion. This shows a growth of 20% from the N 16.89 billion posted in the second quarter of 2008.

Meanwhile, Zenith Bank’s stock closed last Friday at N15.40 per share, an indication that prospective investors who bought its public offering in 2007/2008 had lost N23.50 per share while the existing shareholders lost N21.50 per share.


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