(Ecofin Agency) – Depending on market conditions, Ecobank, whose revenues have once again crossed the $2 billion mark, plans to raise Eurobonds. The amount should not exceed $600 million, while its shareholders will not receive dividends this year, after a resumption of distribution last year.
Ecobank Transnational Incorporated (ETI) is preparing to raise up to $600 million through new Eurobond issuances this year, Alain Nkontchou, chairman of the bank’s board, announced at the General Meeting extraordinary held in Lomé, the Togolese capital, this Thursday, June 6, 2024. According to him, this operation is crucial to strengthen the bank’s financing structure.
This is the second year in a row that ETI shareholders have been asked to comment on a new fundraising. Last year, they had already given the green light for capital mobilization to the tune of $500 million.
“On April 18, 2024, we repaid the $500 million Eurobond issued in April 2019 using short-term bridge financing. Today, we are seeking shareholder approval to replace this financing with a longer-term facility through a new Eurobond issue,” he explained.
Indeed, $250 million had been mobilized via a bridging loan, arranged jointly by Afreximbank and Africa Finance Corporation, the institution indicated at the beginning of March 2024.
This new issuance could include senior debt, subordinated debt eligible for third-party capital, or a combination of the two, depending on market conditions, up to a maximum amount of $600 million, according to its information. For the Cameroonian financier, the fundraising will allow Ecobank to consolidate its liquidity and support its growth objectives across its various markets in Africa.
The resolution was widely approved by shareholders who, this year, will not receive dividends on the $488.4 million in profits made. Last year, however, the banking group resumed the distribution of dividends after a four-year interruption. Thus, the entire attributable profit will be transferred to retained earnings, indicated Alain Nkontchou.
“We know we have work to do to improve dividends so you can receive them sooner rather than later”, indicated Jeremy Owori, CEO of the group, to appease small shareholders. “ The plan we are working on with the board and management is to be able to generate sustainable profits in the short, medium and long term and to create value for all our shareholders and the communities in which we live and operate. , he continued.
Fiacre E. Kakpo
