BY PETER EGWUATU
Shareholders of Sterling Bank Plc have unanimously endorsed proposal by the Board of Directors of the bank to raise N20 billion by way of private placement in order to boost the company’s capital base.
In this regard, the shareholders at the Extra Ordinary Meeting held in Lagos on Tuesday authorized the Board of Directors of the bank to issue up to 7,471,698.,113 ordinary shares of 50 kobo each from the company’s share capital by way of special/ private placing to Messrs Silverlake Investment Limited or such other identified strategic investor at a price of N2.65 per share or such other price as the directors may determine in the interest of the company.
Other resolutions approved at the meeting by the shareholders include: To raise additional capital up to USD 200 million or its equivalent in naira through any of combination of the following: equity, global depository receipts , quasi equity, convertible loans, medium term notes, bonds and any other debt instrument(s), whether secured or unsecured, senior or subordinated by way of a public offering, rights issue, and private placement.; To authorize directors to take any action required to give full effect to these resolutions.
Speaking to newsmen after the meeting, Managing Director/CEO, Sterling Bank Plc, Mr. Yemi Adeola said that the fund raising become necessary in order to meet the Central Bank of Nigeria, CBN Basel and 11 capital requirement.
According to him “Sterling Bank has raised N12 billion through a successful rights issue and with the N20 billion being sort for, it will take the bank to N32 billion capital which will be above tier 1 capital requirement. Also by the time we get another 200 million dollars, the bank will have N90 billion capital, which will be in compliance with tier 11 capital requirement.”
Continuing, he said “Shareholders do not need to panic on any share reconstruction, as the bank is still within the threshold of paying dividend to shareholders. There won’t be any share reconstruction. The money we would be getting from the Special Purpose Vehicle, SPV will help to boost our business and the dilution of the shareholding will be just 20 per cent.”
Meanwhile, shareholders commended the move by the bank, saying the increase in share capital would enable the bank to explore more opportunities to increase its capital base and enhance its market share in the banking industry.