Amid CEO’s sudden resignation, First Bank halts plan to raise N300bn fresh capital

Amid the sudden resignation of the Managing Director/Chief Executive Officer of First Bank Nigeria Limited, Adesola Adeduntan, FBN Holdings Plc has announced the cancellation of its proposed Extraordinary General Meeting (EGM).

The EGM was scheduled to be held virtually on Tuesday, April 30, 2024 where plans for the consideration and authorisation of the company to undertake a capital raise of up to N300 billion and other ancillary matters were to be discussed.

Adeduntan’s tenure was expected to expire on 31 December 2024, but, in a sudden and shocking development, he announced his resignation from the first-tier bank on April 20, 2024.

Though no reason was given for the cancellation of the EGM, it might not be unconnected with Adeduntan’s resignation.

The acting Company Secretary, FBN Holdings, Mr. Adewale Arogundade, in a signed statement released to the investing public on the Nigerian Exchange Limited (NGX), stated that the EGM scheduled for the consideration and authorisation of the company to undertake a capital raise of up to N300 billion and other ancillary matters has been cancelled.

“Further information will be provided in due course, as appropriate,” the statement added.

The N300 billion capital raising exercise is coming on the backdrop of the Central Bank of Nigeria (CBN)’s new capital requirement for banks operating in Nigeria.

READ ALSO: Otedola emerges chairman of First Bank Holdings

According to the earlier notice for the meeting, the capital raise transaction would be by shares issuance via public offer, private placement, or rights issue in the Nigerian or international capital markets at a price to be determined by way of a book-building process or any other valuation method or combination of methods.

The notice said the issuance of shares will be in such tranches, series, or proportions and at such periods dates, coupon or interest rates within such maturity periods and upon such other terms and conditions as may be determined by the board of directors, subject to obtaining the approvals of the relevant regular authorities.

It would be recalled that Adeduntan, who was appointed CEO of the bank on January 1, 2016, had stated in his resignation letter that he was leaving to pursue other interests.

The boards of FBN Holdings, the parent company of First Bank, and that of the bank accepted the resignation and thanked the outgoing CEO for his service to the financial institution.

The letter read: “As you are aware, my contract would be expiring on 31 December 2024, after which I would no longer be eligible for employment within the bank having served as the Managing Director/Chief Executive Officer of FirstBank for a record time of nine years.

“I have however decided to proceed on retirement with effect from 20 April 2024, to pursue other interests”.

The bank chief who retired in 2021, from the then-board of the financial institution, was reinstated a few days after by the CBN.

By Babajide Okeowo

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