Recapitalisation: Shareholders Await GTCO, Other Banks’ Allotment of N1.27tn Shares

Kayode Tokede

Shareholders who invested in the just concluded public offers by five major banks are anxiously waiting for the allotment of the combined N1.27 trillion shares sold by the banks two months after conclusion of the exercise.

The banks are; Guaranty Trust Holding Company Plc (GTCO), Access Holdings Plc, Zenith Bank Plc, FCMB Group Plc and Fidelity Bank Plc.
For instance, GTCO completed its N400.5 billion public offer on August 12, 2024, but the shares are yet to be allotted two months after. Similarly, Access Holdings rights issue of N351.01 billion ended on August 23, 2024 after extending the offer by one week.

Access Holdings had concluded a Rights Issue of 17,772,612,811 ordinary shares of 50 kobo each at N19.75 per share on the basis of one (1) new ordinary share for every existing two (2) ordinary shares.

GTCO raised N400.5 billion via its offer for subscription of 9,000,000,000 ordinary shares of 50 kobo each at N44.50 per share.
GTCO in its prospectus to the offer said: “The final allocation split between retail investors and institutional investors will be determined upon completion of the capital verification exercise and the approval of the basis of allotment. Investors shall be informed of the final allocation split and allotment through the publication of the allotment announcement.

“The CSCS accounts of successful applicants will be credited with the Dematerialised Offer Shares not later than five business days from the allotment date in accordance with the SEC Rule on the Dematerialisation of Share Certificates.”

On its part, Zenith Bank, had extended its public/ right issues for one week that ended September 23, 2024 and FCMB Group’s N110.9 billion public offer that ended September 4, 2024.

Fidelity Bank extended its N127.01 billion public offering and rights issue by two weeks. The bank applied and received the approval of Securities and Exchange Commission (SEC) to extend the closing date of the application and acceptance lists till August 12, 2024.
Fidelity Bank opened its public offer and Rights Issue on Thursday June 20. The bank was in the stock market to raise a total of up to N127.1billion by way of a Rights Issue to existing shareholders and a Public Offer (the Combined Offer).

Following the delay, some shareholders have questioned the prolonged allotment of shares, stressing that the adoption of electronic, among other means of transactions should ease shares allotment.

Speaking on the matter, the National Coordinator Independent Shareholders Association Of Nigeria (ISAN), Mr. Moses Igbrude said: “There are many innovations involved in raising capital and then you know that it’s a Central Bank of Nigeria (CBN) induced policy and they were very specific on it.

“So, when the offer comes like this, the delay would be from CBN, because they would want to investigate or verify the source of the funds. So that’s what is responsible for the delay. “

He urged shareholders to exercise patient. He added that, CBN wants to avoid most of the issues relating to capitalisation in 2008 where banks gave loans to customers to buy their own shares.

“Those are the things they are trying to vet, so they can eliminate those shortcomings. So investors should know it’s not going to be a three months journey, as there’ll be thorough scrutiny before allotment,” he said.

Also commenting, Investment Banker & Stockbroker, Mr. Tajudeen Olayinka said, “Because of the capital verification it’s taking some time. We have even been receiving some kind of unusual requests from the lead issuing house.

“I don’t think the delay is likely from the Securities and Exchange Commission (SEC). It is when they have done their capital verification that SEC can now approve. Everything is still with the CBN – that’s what I suspect.

“The allotment may take more time because of the introduction of capital verification. They did it in the past. What they normally do before was between two to three weeks, shareholders get their allocation, but now, they are investigating some investors.”

In the same vein, a Chartered Stockbroker, Mr. Charles Fakrogha stated: “I will always tell investors to remain patient, because this is not the first time we are doing this kind of fundraising.

 “There are timelines for the whole exercise- the offer opening, it closes, all the backend work is ongoing and of course, the allotment approval, crediting investors that bought via their CSCS account and these things have their time.

“However, as at now, all those things are not being followed. So, I’d still just advise shareholders to be patient and of course they will get official communication from the regulators.

“For me, I believe the issuers are ready to follow the timelines, but there might be issues here and there. Just like you might say you want to complete a particular project and then issues show up,” he added.

President, Progressive Shareholders Association of Nigeria (PSAN), Mr. Boniface Okezie said, “Once they get approval from SEC and CBN, they will allot through the CSCS account automatically.

“However, I don’t know why it’s taking them long to do so. We are in October, so for me, I’d say by the end of this month, they should be able to make a publication of allotment and category document, while stating if there are returns.

“However, the CBN has to do a thorough verification to ascertain where the monies come from, which shouldn’t take them more than a week because it’s online. Then go to SEC and get affirmation. Look at the papers given to them and see if there’s full compliance by the issuing houses.

“That’s why I said earlier that CBN and SEC must be proactive if they mean business. You don’t have to call the bank to the market to raise money and at the end of the day, the money will be sitting there and you deny them the essence of having those monies.”