Qatar National Bank raises stake in Ecobank

Qatar National Bank (QNB) has increased its stake in Ecobank Transna-tional Incorporated (ETI) by more than 60 per cent in the past two years.

The investment has earned Qatar National Bank the largest single shareholder in the pan-African lender.

QNB is listed on the Qatar Exchange, with the Qatar Investment Authority (QIA) as its major shareholder.

QNB, which acquired 11.1 per cent equity stake in Ecobank in 2014, has grown its equity stake to 18 per cent, trailing Nedbank Group Limited, which controls the largest equity stake of 20.7 per cent, according to the last audit for the period ended December 31, 2015.

In third quarter of 2014, QNB acquired about 1.77 billion ordinary shares of ETI, which gave the Qatari bank 11.1 per cent equity stake in ETI.

At the same time, QNB also acquired about 732.28 million preference shares.

Ecobank late last month announced that QNB has decided to exercise its option to convert its preference shares totaling 732.28 million preference shares to ordinary shares. At the previously agreed conversion rate of one preference share for 0.76923 ordinary share, QNB will receive about 563.26 million ordinary shares.

QNB was the major holder out of the total number of ETI’s preference shareholders who decided to convert their preference shares to ordinary shares by the expiration of the conversion deadline on October 31, this year. Altogether, ETI will issue about 630.33 million ordinary shares in exchange for 819.42 million preference shares.

The issuance of the new ordinary shares will increase QNB’s shareholding from 4.334 billion ordinary shares or 18.0 per cent as at the last audit to about 4.897 billion ordinary shares or 19.8 per cent after the conversion. The new issuance will also increase ETI’s issued share capital from 24.10 billion ordinary shares of 2.5 US cents to 24.73 billion ordinary shares.

ETI, which is also listed on the Ghana Stock Exchange in Accra and the West Africa Stock Exchange (BRVM) in Abidjan, has indicated it was ready and in favour of issuing the new shares. ETI had said the 819.42 million preferences shares will be converted to 630.33 million ordinary shares at an implied conversion price of N21.32 per new ordinary share upon receipt of requisite approvals.

Sources in the know of regulatory affairs at the weekend said Ecobank will receive a “no objection” clearance from the capital market regulators.

Under the terms on conversion of preference shares approved by all parties to the acquisition of Oceanic Bank, which resolution was passed on September 14, 2011, preference shareholders had the right, exercisable at any time between the third anniversary of the issue date and the fifth anniversary of this date, to convert their preference shares into ordinary shares in the company at the rate of one preference share to 0.76923 ordinary share.

Preference shareholders, therefore, had the right to convert their preference shares up to Monday October 31, 2016. Out of outstanding of 1.03 billion preference shares as at the end of December 2015, the holders of 819.42 million preference shares exercised their right to convert their preference shares into ordinary shares in the company within the stipulated timeline.

Group chief executive officer, Ecobank Transnational Incorporated (ETI) Plc, Ade Ayeyemi said the decision to convert the preference shares to ordinary shares underscored the trust by the preference holders in the Ecobank Group.

“We appreciate the trust and confidence that the preference shareholders, particularly QNB, have in Ecobank. With the support of all our shareholders, we shall continue to provide the best quality banking services to our numerous clients across the largest banking network in Africa,” Ayeyemi said.

He said ETI is taking all necessary steps to get the shares converted, issued and listed on the three stock exchanges where it is listed.

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