The restructuring of Guaranty
Trust Bank (GTBank) Plc into a financial holding company has shown it’s moving several
steps forward with rise in equities. On Wednesday, November 4, 2020, the
company informed the investing public that it had obtained an
approval-in-principle from the Central Bank of Nigeria (CBN) and a No-objection
from the Securities and Exchange Commission (SEC) to restructure.
According to the notice signed by
Erhi Obebeduo, the scribe of GT Bank, after the exercise is completed, GTBank,
which will now become the banking subsidiary of the new entity, will be
delisted from the Nigerian Stock Exchange (NSE) and the London Stock Exchange
(LSE), where shares of the firm are currently being traded. On the local
exchange, equities of GTBank went up on Thursday as at press time by 15 kobo or
0.47 per cent to N32.25 each.
According to BusinessPost, It was
explained that the banking arm of the holdco will be re-registered as a private
limited liability company, though under the relevant provisions of the Nigerian
law. However, a deal will be struck with shareholders of GTBank for the
exchange of the bank’s stocks for the stock of the new financial holding
company at a court-ordered meeting to be fixed by a Federal High Court in
Nigeria.
According to the disclosure,
“under the restructuring, it is proposed that the issued shares in the bank be
exchanged on a one-for-one basis for the shares in a financial holding company.
“The bank’s existing Global Depository Receipts (GDRs) are also proposed to be
exchanged on a one-for-one basis for the new GDRs to be issued by the financial
holding company.” GTBank explained that the holdco would have an
“organisational structure similar to that used by a significant number of major
financial institutions” in the world and would be “regulated by the CBN,” the
banking watchdog in Nigeria.
The lender further explained that
the new arrangement was expected to create more value for the company and the
shareholders as the “the board of directors of GTBank made the decision to
embark on the restructuring following a comprehensive strategic evaluation of
the operating and competitive environment of the Nigerian banking sector in the
near term.”
“The board expects that the
financial holding company will have greater strategic flexibility to adapt to
future business opportunities as well as market and regulatory changes than is
currently the case,” it said
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