LOME, TOGO, Ecobank Transnational Incorporated (ETI), a pan-African banking group, with headquarters in the Togolese capital, has announced a decision to raise 400 million US dollars to strengthen its capital position.
The shareholders approved the decision during the bank's 29th Annual General Meeting and Extraordinary General Meeting held here last week. They approved the issuance of up to 400 million USD in convertible bonds of five years maturity and a coupon rate of 6.46 per cent above the three-month London Inter-Bank Offered Rate (LIBOR), with an option to convert at an exercise price of six US cents during the conversion period.
The bonds will soon be on offer to all Ecobank shareholders on identical terms and the proceeds will be used to resolve the legacy loans and to optimize the maturities of the group's debt portfolio. A total of 200 million USD has been earmarked for the payment of the short-term bridging finance used to create an entity to address challenged assets of the group in Nigeria.
The pan-African banking group expects to allocate the remaining 200 million USD to a deliberate restructuring of its debt portfolio, replacing costly short-term borrowings with loans of a tenure in excess of five years.
Ecobank Group Chairman Emmanuel Ikazaboh said: "We are delighted with the strength of the support shown for the issue by our existing shareholders, as it vindicates the vigorous action taken to address our challenged legacy assets, as well as indicating their confidence in Ecobank's future."
Group Chief Executive Officer Ade Ayeyemi said all of the businesses were making meaningful progress, despite continued macro-economic challenges in some parts of the continent. He raised ongoing focus on cost discipline, stringent credit control and stronger digitalized services of the pan-African banking group.
Ecobank's total equity as of Dec 31, 2016 stood at 1.8 billion USD, down 132 million dollars year on year. However, the group said its wide capital adequacy levels remained healthy.
Source: NAM NEWS NETWORK