Shareholders approve Sterling Bank’s N12.5bn rights issue 5 hours ago Shareholders of Sterling Bank Plc have expressed their support for the bank’s ongoing rights issue to raise N12.5bn. A statement by the bank on Friday noted that the various shareholders indicated interest in picking up their rights, adding that this would help to boost the expansion drive of the bank. The bank is raising N12.5bn through a rights issue of about 5.889 billion ordinary shares of 50 kobo each at N2.12 per share. Sterling Bank had traded at a high of N3.05 at the stock market. The shares have been pre-allotted on the basis of three new ordinary shares of 50 kobo each for every eight ordinary shares of 50 kobo each held as at May 20, 2013. The President, Association for the Advancement of Rights of Nigerian Shareholders, Dr. Faruk Umar, said the rights issue came at the right time and at the right price. He also noted that the historic performance of the bank, as exemplified by the impressive results and dividends for the 2012 business year, had made it a toast of investors. “We are going to invest in the bank; the rights’ price is a bonus to shareholders because even at the market price, the bank is grossly undervalued. There is a strong possibility of a double in the price in the next two years,” Umar said. On his part, another shareholder, Mr. Nonah Awoh, said the board should make arrangements for oversubscription given the mood of the investors and general perception of the bank at the stock market. He said the profit and return forecasts of the bank, though conservative, imply a huge inflow of over 50 per cent return from dividend payments alone in five years, noting the positive relation between such huge payouts and capital gains at the stock market. President, Progressive Shareholders Association of Nigeria, Mr. Boniface Okezie, said the rights issue would lay another strong foundation for future growth noting that additional funds would allow the bank to increase lending to the real sector and further contribute to national economic growth. According to him, increased lending and expansion will lead to increased returns to shareholders. The statement added that the application list, which opened on June 24, 2013, will run up till July 31, 2013.
Posted on: Mon, 01 Jul 2013 08:59:52 +0000
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