GTCO’s N400.5bn Public Offer Undersubscribed by 48%, to Raise Fresh Capital

Nume Ekeghe

The Guaranty Trust Holding Company Plc (GTCO) has announced the outcome of its N400.5 billion public offer, which was undersubscribed by 48 per cent, raising approximately N209.01 billion against the initial target.

The shortfall of N191.09 billion has been attributed to several factors, including the share price of N44.50 per share and the absence of a rights issue.

GTCO offered subscription, 9 billion ordinary shares of 50 kobo each at N44.50 per share on the Nigerian Exchange Limited (NGX). The offer garnered 130,617 valid applications for 4,705,800,290 shares, representing a total subscription of 52 per cent. Despite the shortfall, GTCO described the exercise as the first tranche of its equity capital raise programme, positioning it as a strategic milestone for the group’s future growth initiatives.

It added that the capital verification exercise was completed by the Central Bank of Nigeria (CBN), and the approval of the Basis of Allotment of the Offer was obtained from the Securities and Exchange Commission (SEC).

The Group Chief Executive Officer of GTCO, Segun Agbaje, in a statement, said: “We extend our sincere appreciation to our new and existing shareholders, as well as the regulatory authorities, for their unwavering support during this initial phase of our equity capital raise.”

He added: “The strong participation and successful capital verification exercise and allotment process reaffirm the confidence investors have in our fundamentals and execution capabilities. This sets a solid foundation for accelerating our strategic roadmap, which aims to pivot the Group for transformational growth and unlock greater value across the Group’s Banking and Non-Banking businesses.”

When the bank in August 2024 concluded its capital-raising exercise, its stock price was trading above N45.00 per share on the Exchange.

This, according to capital market stakeholders, was a higher price that discouraged new investors from participating in the public offer.

A reliable shareholder stated that new investors were not interested in the price, given it was a public offer that came with a higher price. The shareholder stressed that a hybrid offer could have given room for existing shareholders to take up their rights.

The likes of Access Holdings and FCMB Group, which recorded successful capital-raising exercises from the Nigerian capital market, extended their rights issue or public offer by one or two weeks, creating room for more investor participation.

In a regulatory filing at the NGX, Access Holdings stated that it had secured full regulatory approvals from the CBN and the SEC for its recently concluded rights issue of 17.77 billion ordinary shares of 50 kobo each at N19.75 per share, successfully raising the target amount of N351 billion.

FCMB Group announced that it had successfully completed its public offer and raised about N147.5 billion from the investing public, while Access Holdings successfully raised N350.96 billion to surpass the new minimum capital requirement of N500 billion stipulated by the CBN.

Fidelity Bank Plc, FBN Holdings Plc, and Zenith Bank Plc also extended their capital-raising exercises with the hope of attracting more investors to take up their rights.

In the case of GTCO, the management rejected the opportunity to extend its N400.5 billion public offer and will be heading back to the capital market in 2025 to raise fresh capital.

Proceeds from the combined equity raise, the bank said, will be strategically deployed to recapitalise the group’s flagship subsidiary, Guaranty Trust Bank Limited (GTBank Nigeria), enhancing its ability to meet regulatory requirements and further solidify its position as a leading financial institution.