Wema Bank, one of Nigeria’s foremost financial institutions with an operational presence in key areas of the country, has decided to raise an additional NGN40 billion by right issue or way of right.
According to Investopedia, a right issue or rights offering is an avenue by which each shareholder receives the right to purchase additional shares at a specific price and within a specific period (usually 16 to 30 days).
This decision was reached at the bank’s just-concluded extra-ordinary general meeting, which took place at Wema Towers, 54 Marina, Lagos State, Nigeria.
According to Johnson Lebile, Company Secretary/Legal Adviser, amongst its resolutions were;
That following the completion of the bank’s share reconstruction exercise, the Board of Directors be and is hereby authorized to raise capital of up to NGN40,000,000,000 by way of a rights issue to the existing shareholders of the bank by issuing two new shares for every three shares held in the reconstructed capital of the bank (“Rights Issue”), subject to obtaining relevant regulatory approvals.
That the directors of the bank were advised to exercise their rights issue on the agreed date and terms.
That the shareholders hereby waive their preemptive rights to any unsubscribed shares offered pursuant to the Rights Issue in the event of an under-subscription and hereby authorize the Directors to offer/issue such unsubscribed shares at a price not less than that specified in the Rights Issue Circular, in such manner as they think most beneficial to the Bank;”
That the Directors be and are hereby authorized to approve, sign, and/or execute all documents, appoint such professional parties and advisers, and perform all other acts and do all other things as may be necessary to give effect to the above resolutions, including, without limitation, complying with any regulatory authorities’ directives;”
The mode of disposal for the unsubscribed shares and other important details are stated clearly in this circular.
For more information, kindly visit the Nigerian stock exchange website (www.ngxgroup.com).