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Ecobank to cancel 17.4b shares in massive shares consolidation

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Ecobank to cancel 17.4b shares in massive shares consolidation

Ecobank Transnational Incorporated (ETI) Plc, the holding company for the pan-African Ecobank Group, plans to cancel about 95 per cent or 17.4 billion ordinary shares of its current issued shares under a massive shares consolidation exercise that will see shareholders surrendering 20 existing shares for a new share.

ETI had struggled with poor corporate governance tag and lately declining earnings performance, pushing its current market valuation below its nominal value.

At an extraordinary meeting at the ETI’s head office in Lome at the weekend, resolutions were passed in favour of shares consolidation by increasing the nominal value of the ordinary shares of the company from 2.5 US cents per share to 50 US cents per share. This would be done by consolidating every 20 ordinary shares held into one new ordinary share each, and issuing in replacement, new ordinary shares of 50 US cents each.

ETI currently has a total of 18.350 billion ordinary shares on the Nigerian Stock Exchange (NSE) with total market valuation of N311.94 billion. ETI’s share price closed at the weekend at N17 per share, nearly half of the company’s current nominal value of N32 per share.

Read also: Ecobank gets restraining order against Honeywell, Otudeko over N5.5b debt

The shares consolidation will lead to cancellation of 17.43 billion ordinary shares and revaluation of the outstanding post-consolidation shares of 918 million ordinary shares to ensure that the cancellation does not result in depreciation for shareholders.

Also, at the group’s annual general meeting at the weekend, shareholders approved payment of total dividend of $48.2 million, breaking away from a two-year drought during which ETI did not declare a dividend.

The general meeting approved the company’s accounts for the 2015 financial year and the appropriation of its profits, which amounted to $60.77 million.

Besides Nigeria, ETI is also quoted on the Ghana Stock Exchange (GSE) and the Bourse Régionale des Valeurs Mobilières (BRVM), the Abidjan, Cote d’Ivoire-based regional stock exchange for eight African countries including Benin, Burkina Faso, Guinea Bissau, Côte d’Ivoire, Mali, Niger, Senegal and Togo.

Incorporated in Lomé, Togo, ETI currently has a presence in 36 African countries.

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