Qatar National Bank (QNB), which has Qatar Investment Authority (QIA) as its major shareholder, will receive additional equity stake of 3.07 per cent in Ecobank Transnational Incorporated (ETI) Plc in exchange for the Qatari’s preference shares in the financial holding company for the Ecobank Group.
QNB has decided to exercise its option to convert its preference shares totaling 732.28 million to ordinary shares. At the previously agreed conversion rate of one preference share for 0.76923 ordinary share, QNB will receive about 563.26 million ordinary shares, equivalent to 3.07 per cent of ETI’s current total outstanding ordinary shares of 18.35 billion ordinary shares.
QNB was the major holder out of the total number of ETI’s preference shareholders who decided to convert their preference shares to ordinary shares by the expiration of the conversion deadline on October 31, 2016.
Altogether, ETI will issue about 630.33 million ordinary shares in exchange for 819.42 million preference shares.
ETI, which confirmed the conversion in a regulatory filing at the Nigerian Stock Exchange (NSE) on Monday, stated that holders of 819.42 million preference shares had indicated their intention to convert their preference shares into ordinary shares.
Upon receipt of requisite approvals, the 819.42 million preferences shares will be converted to 630.33 million ordinary shares at an implied conversion price of N21.32 per new ordinary share. QNB, with 732.28 million preference shares, was among the holders that exercised their conversion option.
By a resolution passed on the 14th of September 2011, the ETI board of directors had approved the acquisition of Oceanic Bank International Plc. In line with the terms on conversion of preference shares recommended to Oceanic shareholders by the Oceanic board, as stated in the scheme of arrangement documents, and approved by Oceanic shareholders, preference shareholders had the right, exercisable at any time between the third anniversary of the issue date and the fifth anniversary of this date, to convert their preference shares into ordinary shares in the company at the rate of one preference share to 0.76923 ordinary share.
Preference shareholders, therefore, had the right to convert their preference shares up to Monday 31st of October, 2016. Out of an outstanding of 1.03 billion preference shares as at the end of December 2015, the holders of 819.42 million preference shares exercised their right to convert their preference shares into ordinary shares in the company.
After the issuance of the new ordinary shares, ETI’s total outstanding shares will increase to 24.73 billion ordinary shares upon conversion.
Group chief executive officer, Ecobank Transnational Incorporated (ETI) Plc, Ade Ayeyemi said ETI is taking all necessary steps to get the shares converted, issued and listed on the three stock exchanges where it is listed, including NSE, Ghana Stock Exchange in Accra and West Africa Stock Exchange (BRVM) in Abidjan.
QNB had in September 2014 acquired more than 11 per cent equity stake in ETI in three deals valued at about N35.4 billion through the NSE. QNB then acquired about 1.77 billion ordinary shares of ETI in an off-market trade. Off-market trade implied that the deals were sealed outside the floor of the NSE, although ETI still has to report such transactions in compliance with the listing rules at the NSE.
The acquisition transaction, which was concluded in three deals, was sealed at N20.01 per share, more than 20 per cent above ETI’s opening price of N16.62 per share at the NSE. Besides the ordinary shares acquisition, which gives QNB 11.1 per cent equity stake in ETI, QNB had also acquired about 732.28 million preference shares. The acquisitions, the first by QNB in shares of ETI, give the Gulf bank a major inroad into the African market. ETI is a pan-African financial services holding company and it is the parent company of all Ecobank banking brand including Ecobank Nigeria Limited.
QNB, which is listed on the Qatar Exchange, had indicated it would be a long-term investor in ETI.
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