The board of Zenith Bank Plc, on Tuesday, said it has received the approval of the Securities & Exchange Commission (SEC) to extend its ongoing Rights Issue and Public Offer by two weeks. to raise a total of N289,383,625,518.00 only.

The bank is issuing by way of rights to existing shareholders- 5,232,748,964 ordinary shares of 50 kobo each at N36.00 per share on the basis of one new ordinary share for every six held at the close of business on July 24, 2024. It is also undertaking a public offering by way of an offer for subscription of 2,767,251,036 ordinary shares of 50 kobo at N36.50 per share.

The offers originally planned to close on Monday, September 9, according to a statement by Michael Out, the company secretary, will now close on Monday, September 23, 2024.

The statement recalled “that the rights issue and public offer launched on August 1, 2024, were disrupted by the nationwide protest that commenced on the same day, which disrupted business operations and individual movement across the country.”

The decision to extend, he continued, is “to provide ample opportunity for shareholders to take up their rights and the general investing public to subscribe to the public offer.”

The group expects N101,004,662,814.00 (estimated net proceeds of N99,265,505,012.89 after deducting offer costs of 1.7129% of gross proceeds) as gross proceeds.

According to the public offer’s prospectus, working capital to support expansion of operations is to gulp the lion’s share of N44.669bn or 45% of the net proceeds; followed by N34.742bn or 35% for expansion into other markets; and N19.853bn or 20% targeted for investment in technology.

For the rights issue, gross proceeds is N188,378,962,704.00, after which the N3,242,668,424.38 estimated issue costs or 1.7214% of gross proceeds, leaves a net proceed of N185,136,294,279.62. Working capital to support expansion of the group’s operation is projected to gulp N83.311bn or 45%; ahead of another N64.797bn for expansion into other markets; and N37.027bn for investment in technology.

A further breakdown of this by the chairman in his letter to shareholders shows that Zenith Bank’s expansion plans into the West African sub-region over the coming 12 months will gulp N40.729bn or 22%; while the European expansion (France- Paris) will take the remaining N24.067bn. The group will also utilize N68.5bn or 37% of the proceeds meant to support working capital to offer loans to corporate, SME and retail customers; N14.81bn or 8% is for branch maintenance across the country. For investment in technology, computer hardware/server is billed to take N16.662bn; followed by N7.405bn for software licenses and registrations; same as network infrastructure upgrade; while the balance of N5.554bn is for cybersecurity architecture/software.

Also, a breakdown of the public offer’s net proceeds shows that working capital support will also be driven by loans to corporate, SME and retail customers valued at N36.728bn or 37%; branch maintenance across the country, N7.941bn.

Of the public offer proceeds, the group’s West African will get N21.838bn, or 22%; while that of Paris is N12.904bn or 13%. Investment in technology from the public offering will also be led by N8.933bn for computer hardware/servers; N3.97 each for software licences and registrations as well network infrastructure upgrade respectively; while cybersecurity architecture will take the remaining N2.977bn.

Investdata News also recalls that Zenith Bank’s peers like Fidelity Bank, Access Holdings, Guaranty Trust Holding Company (GTCO), FCMB Group, have recently embarked on capital raising exercises in line with the directive of the Central Bank of Nigeria (CBN),

It is expected that United Bank for Africa Plc will open the bid to shore up its own capital in the coming weeks with all arrangements already in the concluding stages