First Bank’s Capital Raise Divides Shareholders
The plan by First Bank Nigeria Holdings (FBNH) Plc to raise fresh funds has triggered a shareholder crisis which culminated in a protest today by a section of the bank’s minority shareholders at its head office in Marina, Lagos.
Some of the shareholders under the umbrella of the Trusted Shareholders’ Association, led by Mukhtar Mukhtar, were seen in front of the HQ with placards demanding that the deposit money bank be allowed to hold their coming annual general meeting (AGM) as scheduled.
The Mukhtar Mukhtar-led protest was in reaction to other shareholder groups who have gone to court to stop First Bank from raising fresh capital and to stop the bank from admitting some directors onto the board of the bank.
“Those who have gone to court to stop First Bank’s AGM know that it is illegal. AGMs are statutory meetings,” Mukhtar Mukhtar told newsmen during the protest.
He said that they are at the headquarters of the bank to register their displeasure at the attempt by other shareholders to stop the AGM from holding, insisting that it is a statutory duty to hold AGMs.
“We are here at the First Bank office to register our displeasure, our discontentment, and rejection of the attempt by some shareholders to prevent the Annual General Meeting of First Bank from holding and preventing the consideration of some very important resolutions for the progress of the bank.
“These shareholders have approached the court to stop First Bank from raising capital like other banks are doing and then not to admit some directors onto the board of the bank. Those who have gone to court to stop the AGM know that it is illegal. AGMs are statutory meetings.”
In a recent corporate notice filed to the Nigerian Exchange, the bank disclosed that it intended to raise fresh capital through rights issues if the shareholders approve the proposal at the AGM scheduled for this month.
The fundraising which is part of the items for special considerations to be presented before the shareholders will be done through the creation of additional 8.974 billion ordinary shares at 50 kobo each.
Some of the shareholders who approached the court to stop the AGM exclusively told InsideBusinessNG that they were not pleased with the plan to issue more shares, saying that doing so would dilute the valuation of the stock.
“After many years of no returns on investment coming from the Bank due to a huge stock of non-performing loans, it is unfair for the Bank to embark on a move to dilute the value of its shares so soon after coming out of the crisis period. Let the bank allow shareholders to enjoy some returns before diluting the stock with the fresh volume of shares. This is anti-shareholders interest,” a shareholder of the bank told our correspondent.
The group also announced the appointment of billionaire investor, Femi Otedola who was appointed on July 9, 2023, as non-executive director but is subject to the approval of the shareholders at the upcoming AGM.
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