Plans have been revealed by First HoldCo Plc to sell a 25% stake in the business that was recently transferred to RC Investment Management Ltd., a special purpose organization.
During a recent investor conference call in Lagos, Wale Oyedeji, the managing director of First HoldCo, revealed the development, according to Bloomberg. “Those shares will be disposed of, and we have a variety of options,” Oyedeji stated. Without providing a timeframe, he continued, “In the end, you will see that those shares will be disposed of in the market.”
About 10.43 billion ordinary shares, or 25% of First HoldCo’s total outstanding shares, were transferred to RC Investment Management Ltd. in July through an off-market transaction involving 17 negotiated deals at an average price of N31 per share. The transaction was valued at N323.33 billion, according to Bloomberg, and Oyedeji described RC Investment as a “temporary” holder of the shares. He also confirmed that the company’s ongoing capital raise was “progressing as planned and not impacted by the recent share divestment,” according to Bloomberg.
The name of RC Investment Management’s beneficial owner had previously drawn criticism from the Nigerian Securities and Exchange Commission. When the divestiture is finished, it should clarify First HoldCo’s ownership structure, which has caught the interest of investors and regulators due to concerns about transparency and governance.
In order to meet the new minimum capital requirements set by the Central Bank of Nigeria, First HoldCo Plc is presently trying to enhance its capital base. After a successful N147 billion rights sale earlier this year, the bank intends to raise N350 billion in new capital through private placements this quarter.
Remember how it was earlier reported that during the most recent Annual General Meeting, shareholders of FBN Holdings (now First HoldCo) approved a proposed N350 billion capital raising and a change to the company’s legal and brand name? The Nigerian Exchange Limited received the resolutions.
For the 2023 fiscal year, a dividend of 40 kobo per 50 kobo ordinary share, or N14.36 billion, was also authorized.
Following the July block transaction, Oba Otudeko, a significant shareholder and previous chairman of FirstBank, left First HoldCo. A quarter of the bank’s shares were transferred in the deal, which also included companies connected to Tunde Hassan-Odukale, another former chairman.
On the day of the transaction, the total value traded increased by 1,028.44 percent to N363.41 billion, while the total volume traded on the Nigerian Exchange increased by 807.03 percent to 11.67 billion units due to off-market trades, according to data from CardinalStone Securities. After the transaction, First HoldCo’s stock also reached a 52-week high of N36.45.
