• N29billion rights issue ends
Sterling Financial Holdings Company (Sterling Holdco) Plc, the holding company for Sterling Bank and its former subsidiaries, will today close application list for its N28.79 billion rights issue, marking the end of the group’s N153 billion capital raising.
Sterling Holdco is offering 7.198 billion ordinary shares of 50 kobo each to existing shareholders at N4 per share. The rights issue is pre-allotted on the basis of one new ordinary share for every four ordinary shares held as at close of business on August 06, 2024.
According to the issuance schedule, the rights issue, which opened on Wednesday, September 18, 2024, is scheduled to close today, Monday, October 28, 2024.
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Market pundits yesterday said there were no indications that the rights issue would be extended, although other bank issuers had extended their offers.
Sterling Holdco has up till the close of business today to close or extend the offer period. Any extension must be approved by the Securities and Exchange Commission (SEC).
Sterling Holdco said the N153 billion capital raising was a strategic initiative in the group’s growth strategy, aimed at fortifying its financial foundation, enhancing capital adequacy, and fueling organic growth within the banking subsidiaries.
Sterling Holdco recently secured additional capital of about N75 billion in a major boost to the holding group’s efforts to recapitalise its banking subsidiaries.
Sterling Holdco’s flagship subsidiary- Sterling Bank, and its ethical banking arm, The Alternative Bank are required to raise additional equity capital to meet new capital requirements for banks under the ongoing Central Bank of Nigeria (CBN)’s recapitalisation exercise.
Transaction documents indicated Sterling Holdco raised $50 million or about N75 billion in a private placement subscribed to by a consortium of domestic investors and ultra-high-networth groups.
The placement, completed by all the parties, was in the final stages of approvals by the regulators.
Speaking at the signing ceremony for the placement, Group Chief Executive Officer, Sterling Financial Holdings Company (Sterling Holdco) Plc, Yemi Odubiyi, said that the capital raise signified the market’s confidence in the vision and potential of the group.
According to him, investors’ decision to entrust the group with their hard-earned capital is built on the group’s ability to challenge the norm in Nigeria’s financial services sector.
“Our investors recognise that beyond the profits declared and dividend payouts, we are an enterprise that has consistently demonstrated capacity for innovation, creating and leveraging new opportunities within and outside the industry to deliver value to all our stakeholders.
“From our modest beginnings as a merchant bank, we have evolved into a dynamic enterprise with a proven track record that extends well beyond conventional banking. Now powered by an embedded technology stack that is flexible to the unique demands of the market, we are more than confident in our ability to capture major growth opportunities in Nigeria and beyond,” Odubiyi said.
He added that the group’s vision, performance, and journey continue to be rewarded with the highest form of investor confidence, as exemplified by the injection of more capital.
“This infusion of funds not only reflects the trust our investors place in us, but also serves as a powerful endorsement of our strategy and future potential. With it, we reaffirm our commitment to driving social, sector, and economic growth beyond banking.
“By investing in and incubating new subsidiaries, we will prioritise value creation that stimulates and sustains growth for both the enterprise and the nation’s economy. Our investment strategy is anchored in sustainable practices that will deliver long-term value for society and consistent returns for investors,” Odubiyi said.
Last year, Sterling Holdco transitioned from a commercial bank to a full-fledged financial holdings company with two subsidiary banks.
Odubiyi noted that with several key businesses in the pipeline, the holding company is strategically positioned to seize opportunities beyond those available to its peers.
He pointed out that Sterling Holdco’s performance has seen a steady rise in its fortunes with a 51 per cent increase in its profit before tax in first half 2024 compared to the same period in 2023, and a 19 per cent growth in the total assets of the company within the six months.
Shareholders of the group had approved plans to raise up to N200 billion in new capital at the annual general meeting in Lagos.
Shareholders authorised the board of the company to “raise additional capital of up to N200 billion through the issuance of shares in the Nigerian capital market by way of rights issues, private placements, public offerings, private and other transaction modes”.
The meeting also empowered the board to increase the share capital of the company by the allotment of up to 40 billion ordinary shares of 50 Kobo each “at any time or times during the period of two years” from the date of the passage of the resolution.
