LOME, June 17 (Xinhua) -- Ecobank Transnational Incorporated (ETI), a pan-African banking group, on Friday decided to raise 400 million U.S. dollars to strengthen its capital position.
The shareholders approved the decision during the 29th Annual General Meeting and Extraordinary General Meeting held at the headquarters of the Group in Lome, capital of Togo.
They approved the insurance of up to 400 million dollars in convertible bonds of five years maturity and a coupon of 6.46 percent above 3-month London Inter-Bank Offered Rate (LIBOR), with an option to convert at an exercise price of 6 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 fund of 200 million dollars 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 dollars to a deliberate restructuring of its debt portfolio, replacing costly short-term borrowings with loans of a tenor in excess of five year.
Ecobank's 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."
Regarding Ecobank's performance, Group CEO Ade Ayeyemi said all of the businesses are making meaningful progress, despite continued macroeconomic 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 dollars, down 132 million dollars year on year, however the group said its wide capital adequacy levels remained healthy.
Incorporated in Lome in 1988, ETI is a leading independent pan-African banking group. It currently operates in 33 African countries.