Fresh concerns have been raised over FirstHoldCo Plc’s announcement of its plan to exit regulatory forbearance in December this year.
Also, on Thursday, the All-Share Index (ASI) rose by 39 basis points in early trading, with banking stocks leading the charge up by 130bps.
In a statement on Thursday, First HoldCo Plc assured investors that it remains on course to meet compliance requirements and sustain dividend payments after December 31st, 2025.
In the statement, the company explained the SOL breach at its flagship subsidiary, FirstBank, was tied to foreign currency loans to two customers affected by the over 200 per cent naira devaluation in 2023/2024.
It added that the breach would be resolved with the planned capital raise in the second half of 2025.
FirstHoldCo also clarified that its forbearance exposures were linked to syndicated loans across industry sectors, which are currently being restructured.
“With the planned completion of the capital raise in the second half of 2025 among other measures, the bank will cure the breach in this regard by the end of the year. Furthermore, the bank’s forborne loans are in respect of syndicated facilities that are industry exposures.
“The consortium of lenders is working to re-tenor the facilities to align with their cashflows as all the assets are back to active production and generating appreciable revenue,” it added.
It also noted that some also have receivables awaiting payment from relevant agencies of government and that syndicate lenders would ensure the processes are concluded within the current financial year.
It stated further: “Any loan not fully re-tenored will be fully provisioned and exit forbearance. As a well-diversified financial holding Company, FirstHoldCo will sustain its dividend payments in 2025 and beyond as we remain committed to our esteemed stakeholders.”
However, what FirstHoldCo did not say is that the consortium of lenders in this instance to Aiteo limited have already provisioned for the facility. They include, GTCO, which provisioned in December last year, as well as Zenith Bank and AccessCorp which said they will provision for the Aiteo facility in 10 days.
Banking Analysts wonder what manner of restructure FirstHoldco will undertake over the next 6months when the borrower, Aiteo is in dispute with Shell Trading ( a member of the consortium over valuation of the asset) leading to the provisioning by GTCO and others.
Analysts say FirstHoldco’s statement has not provided any clarity or comfort as to how it will exit forbearance by the end of the year and pay dividend to shareholders.
Analysts also question the status of former Chairmen, Oba Otudeko and Tunde Hassan-Odukale’s shares, (Leadway shares) which Femi Otedola is currently acquiring. The market is seeking full transparency.
In buying those shares, it does not necessarily increase the bank’s capital, but just a matter of crossing shares and taking control of the holding company, as the hard work of raising FirstHoldco’s capital to above the N500 billion mark through Right Issue remains unclear.
In the meantime, the Nigerian equities market continued its upward momentum on Thursday, buoyed by renewed investor confidence in the banking sector following Zenith Bank’s founder and CEO’s share purchases and strong dividend guidance.
The All-Share Index (ASI) rose by 39 basis points in early trading, with banking stocks leading the charge up by 130bps.
All Tier-1 banking stocks traded in the green, led by FirstHoldCo gaining 5.12 per cent, AccessCorp up by 3.34 per cent, Zenith Bank by 2.16 per cent, UBA gained 1.18 per cent, and GTCO marginally by 0.63 per cent.
Nume Ekeghe and Kayode Tokede
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