FBN Holdings revises rights issue proposal amid legal challenges

FBN Holdings Plc has submitted a revised application for its proposed Rights Issue to the Nigerian Exchange Limited (NGX) following the suspension of the original offer due to a court injunction from an aggrieved shareholder.

The updated proposal seeks to issue 5,982,548,799 ordinary shares at 50 kobo each, priced at N25 per share, replacing the earlier plan to offer 8,973,823,198 ordinary shares at N15.50 each.

The new Rights Issue is structured as one new ordinary share for every six ordinary shares held, with a qualification date set for October 18, 2024.

The company’s Annual General Meeting (AGM), scheduled for November 14, 2024, will prominently feature the proposed Rights Issue on its agenda, highlighting FBN Holdings’ ongoing capital-raising efforts. At this 12th AGM, the company will also seek shareholder approval for a substantial N350 billion capital raise, as detailed in the AGM notice.

This capital increase aims to enhance the company’s financial flexibility, enabling it to pursue various capital market transactions, including rights issues, public offerings, or private placements.

FBN Holdings has long sought to bolster its capital base and position itself for sustainable growth. In August 2023, the company initially proposed a N150 billion capital raise to improve its balance sheet, which was approved by shareholders.

However, ambitions later expanded to an N300 billion capital raise by early 2024, a plan that was put on hold due to legal challenges. With the upcoming AGM, FBN Holdings appears poised to move forward, seeking approval for both the revised Rights Issue and the larger capital raise.

The meeting will also address the election of new directors, including the ratification of Adebowale Oyedeji as the Group Managing Director, effective November 13, 2024. As investors await the outcome, the revised Rights Issue presents a significant opportunity to increase stakes at a premium price, reflecting the company’s recalibrated strategy amidst internal restructuring and market challenges.