By Peter Egwuatu
Shareholders of FCMB Plc have unanimously endorsed the proposal by its Board of Directors to increase the share capital of the bank by 575 million shares.
The shareholders at the 27th Annual General Meeting (AGM) held on Wednesday in Lagos gave their support for the increase, even as they requested for a bonus issue.
The bank also disclosed on going discussion with IFC to provide $170 million for equity and debt financing.
Speaking at the meeting, Group Managing Director /CEO, FCMB Plc, Mr. Ladi Balogun said, â€œ the bank is currently discussing with IFC to provide $170 million fund in two tranches. The first tranche will be $60 million equity financing while the second tranche will be N110 million in the form of debt financing that will have seven year tenor with low interest rates.â€
On the fear being expressed by existing shareholders for the dilution of their holdings when the IFC proposed investment materialises, Balogun said, â€œdiluting would be minimal to the existing shareholders. The Board is aware of this and that is why it has proposed a cash dividend for the financial year ended December 31, 2010.â€
In the case of bonus being demanded by the shareholders, the FCMB boss said, â€œ The Board is very mindful of this given the fact that we already have 16 billion shares. The Board will look into the issues and take appropriate action when the time comes.â€
Balogun, further stated that the IFC funds would help boost the profile of the bank both locally and internationally. â€œThe bank will remain focused on leadership inthe niches of retail finance, transaction banking, and investment banking. We would place quality and efficiency ahead of size and we would open branches only where they are economically viable. and profitable.â€ he added.
Speaking at the AGM, Chairman, Independent Shareholders Association of Nigeria (ISAN), Sir Sunny Nwosu, who spoke the minds of shareholders at the meeting cautioned management and Board of the bank not to involve themselves in the acquisition of any of the troubled banks.
According to him, â€œ we the shareholders of these banks are ready to capitalise them when the CBN gives us the go ahead. We donâ€™t want FCMB to get involve in those banks because we would fight back and ensure that the due diligence is followed.â€
The bank proposed a dividend of 5 kobo per share to existing shareholders which was ratified at the meeting. It declared a gross earnings of N35.7 billion, representing a 50.7 per cent fall as compared to the annualised figure to 3oth April, 2009. Post tax profit , over the 8 month period was N564 million, a 85.9 per cent fall, as compared to the annualised figure to 3oth April, 2009.