In a move to repay the short-term financing and debt restructure of the maturity profile, the management of Ecobank Transnational Incorporated has proposed a $400 million convertible bond issue in second quarter of 2017.
The Group Chief Executive Officer, Ecobank, Mr. Ade Ayeyemi in a statement said, “The funds from our proposed $400million convertible bond issue will be used sensibly and profitably, of which $200million would be used to repay the short-term financing used in setting up the resolution vehicle.
“The remaining $200million is for a conscious debt restructure of the maturity profile of the ETI Holdco balance sheet. We are delighted to have very high subscription levels to the issue from existing shareholders, in the region of $300million. The conversion price of the offer is 6 USD cents compared to a current price of 3 USD cents with an interest rate of 6.46 per cent above LIBOR.” The financial institution had already issued $300million supported by existing shareholders.
Ecobank for 2016 financial year had reported a loss Before Tax of N33.7 billion from N40.6 billion profit before tax in 2015, mainly attributable to higher loan impairment charges taken in fourth quarter 2016 Full impairment losses on financial assets of $864million absorbed, predominantly from specific client names related to a legacy portfolio experiencing deterioration in quality Pre-impairment income flat in at $735million as against $738million despite strengthening of the US dollar.
The share price of Ecobank has slumped by 0.4 per cent or N0.03 per share to N7.76 per share yesterday from N7.79 per share it closed on Tuesday when the 2016 financial year results was announced.
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