Leadership (Abuja)
Jerry Uwah
19 November 2007
Abuja — Standard & Poor's Ratings Services has assigned its 'BB-' long-term and 'B' short-term counterparty credit ratings to Zenith Bank Plc. The rating agent stated that the outlook for the bank is stable.
"The ratings on Zenith Bank reflects the high economic and industry risks associated with operating in the Federal Republic of Nigeria (foreign currency BB-/Stable/B; local currency BB/Stable/B), limited business and geographic diversification, and increasing banking sector competition," the agency stated.
The ratings are supported by the bank's leading market position in corporate banking; conservative risk profile and strong asset quality; solid capitalization; and robust funding and liquidity profile.
Meanwhile, the bank has concluded arrangements to float a hybrid offer of N130 Billion from the capital market. The offer arrangements were concluded last Friday during a completion board meeting in Lagos.
The hybrid offer which the bank's management had already noted would be a huge success story will be subscribed for by investors through rights issue and public offers.
Both offers are expected to run simultaneously and will be opened on December 6, 2007 and close on January 17, 2008.
According to the offer prospectus made available to newsmen, the proceeds of the offer would be utilised in financing and sustaining the bank's cutting edge technology for effective first class service in the desire to surpass superior performance.
Also the bank will expend part of the offer proceed on expansion of branch network, incremental of working capital and projects infrastructure finance.
Besides, while the rights issue will be sold at N36.90, the public offer will be subscribed for by investors at a unit price of N38.90.
Further breakdown of the offer being floated showed that rights issue is expected to net a total proceed of N61.1 billion from 1.65 billion ordinary shares, while the public offer will garner N68.5 billion through offer for subscription of 1.8 billion shares.
The joint issuing houses to the offer include Zenith Capital Ltd, Access Bank plc, FBN Capital Ltd and IBTC Chartered Bank plc.
In the event of oversubscription, the bank said excess monies not exceeding 25 percent of the oversubscription in line with Securities and Exchange Commission (SEC)'s rules and regulation may be capitalised and additional shares allotted subject to the approval of the directors of the bank and SEC respectively.
Forecast for the offer showed that profit after taxation will rise in the 2008, 2009 and 2010 to N28.8 billion, N421.3 billion and N56.9 billion, while gross earning is expected to grow to N123.2 billion, N168.6 billion and N215.2 billion in 2008, 2009 and 2010 respectively.
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