Ongoing rights issue by Sterling Bank Plc has been backed by individual retail shareholders and shareholders’ groups, as they have indicated interests in picking up their rights and mobilizing other shareholders to support the recapitalization programme of the bank.
The expressions of interests and supports from minority and retail shareholders reechoed the unanimous endorsement of the bank’s capital raising programme by shareholders at the recent general meeting.
Non-core shareholders, with less than five per cent equity stake, including a large number of minority retail shareholders of more than 88,000, collectively hold about 65 per cent equity stake in Sterling Bank; underlining the highly diversified shareholders’ base of the bank. Most retail shareholders are spread in groups and other representations.
A broad section of shareholders’ groups, representations and individuals interviewed in relation to the rights issue said they would pick up their rights and mobilize others to take advantage of what they described as “a window of opportunity”.
Several shareholders indicated they would demand for additional shares, raising prospects of oversubscription. The supports from non-core shareholders strengthen the prospects for the rights issue, which had earlier received firm commitments from major Nigerian and foreign shareholders including the State Bank of India, Dr. Mike Adenuga, Alhaji (Dr.) Suleiman Adegunwa’s Ess-ay Investments Limited and other directors.
Sterling Bank is raising N12.5 billion through a rights issue of about 5.889 billion ordinary shares of 50 kobo each at N2.12 per share. Sterling Bank had traded at a high of N3.05 at the stock market. The shares have been pre-allotted on the basis of three new ordinary shares of 50 kobo each for every eight ordinary shares of 50 kobo each held as at May 20, 2013. The application list, which opened on June 24, 2013, will run untill July 31, 2014.
According to the President, Association for the Advancement of Rights of Nigerian Shareholders (AARNS), Dr. Faruk Umar the rights issue came at the right time and at the right price.