GTCO raises N209.41bn from first phase of equity capital, to hold second phase in 2025

Guaranty Trust Holding Company Plc (GTCO), the parent company of GTBank, has announced the completion of the first tranche of its equity capital raising. According to the bank, the process raised N209.41 billion from 130,617 valid applications for 4,705,800,290 ordinary shares, which were fully allotted.

This successful process follows the Central Bank of Nigeria (CBN) ’s capital verification exercise and the Securities and Exchange Commission (SEC) ‘s approval of the offer’s basis of allotment.

The first phase of GTCO’s phased equity capital raising programme is structured on a balanced allocation strategy based on an equal split between institutional and retail investors. The bank added that the offer secured significant interest from domestic retail investors.

While reacting to the recapitalization phase, Group Chief Executive Officer of GTCO, Segun Agbaje, who recognized the input of various shareholders said that the process is an affirmation of investors’ confidence in the company’s potential.

“We extend our sincere appreciation to our new and existing shareholders, as well as the regulatory authorities, for their unwavering support during this initial phase of our equity capital raise. The strong participation and successful capital verification exercise and allotment process reaffirm the confidence investors have in our fundamentals and execution capabilities,” he said.

He added that the equity capital raising sets a solid foundation for accelerating GTCO’s strategic roadmap, which aims to pivot the Group for transformational growth and unlock greater value across the Group’s banking and non-banking businesses.

GTCO stressed that proceeds from the combined equity raising would be used to recapitalize the Group’s flagship subsidiary, Guaranty Trust Bank Limited. This would enhance its strength, ground its position as a leading financial institution, and provide the quality to meet various regulatory requirements.

In addition, the company pointed out that the funds raised would support its wide growth innovations ranging from product enhancement to footprint expansion and initiatives across its banking and non-banking subsidiaries. 

This balanced approach aligns with GTCO’s commitment to fostering a well-diversified and robust investor base, the bank said. 

For the second phase recapitalization programme, GTCO said the process will be held in 2025. The company added that the second phase will target core foreign institutional investments to reinforce the Group’s international brand reputation.

Following the capital raise, GTCO reaffirmed its commitment to delivering sustainable value to its stakeholders and driving innovation across the financial services landscape in Africa.

On March 28, 2024, CBN announced an upward review of the minimum capital requirements for commercial, merchant, and non-interest banks. 

Then, the apex adjusted the capital base for commercial banks with international licences to N500 billion. All banks were required to meet the minimum capital requirement between April 1, 2024, and March 31, 2026.

Not only is GTCO strengthening its capital base through share sales,  but MTN Nigeria Communications announced in December plans to issue Series 15 and 16 of its Commercial Papers (CP), with the issuance targeted at raising N50 billion.

The development follows the successful implementation of the Series 13 and 14 CP issuance on November 29 where the company raised N72.18 billion, representing 144 per cent above the N50 billion target.

The telecoms company stressed that the CP issuance is targeted at strengthening its short-term working capital. As MTN Nigeria aims to tap the debt market, the plan also aims to diversify its financial base. 

For the past year, MTN Nigeria has built upon its series of CP issuances. This provides a robust approach as the company seeks to balance its capital structure. In December 2023, MTN Nigeria raised N72.1 billion through CP issuance, followed by an N52.9 billion issuance in November 2023. These funds were used to work capital.

The CP programme enables MTN Nigeria to service its short-term debts and meet cash flow demands without much reliance on long-term financing. For the purpose of financial flexibility, the company will be able to adjust its interest cost and debt logs. 

Read More: MTN Nigeria set to raise another N50bn through commercial papers after previous successful editions.