Lombard Bank seeking MFSA approval for 2-for-3 share rights issue

In what industry experts describes as 'a rare move for Maltese banks', Lombard Bank has requested approval by the Malta Financial Services Authority for a 2-for-3 rights issue of new ordinary shares to be admitted to listing and trading on the Official List of the Malta Stock Exchange.

The bank, which has  submitted a prospectus to the MFSA, said that the new ordinary shares will form part of the same class, have equal rights as, and rank pari passu with, the bank’s existing shares. 

The rights issue will first be offered on a pre-emptive basis to shareholders appearing on the bank’s register of members as at the close of trading on 19 September 2023, with the last trading date being 15 September 2023.

This means that eligible shareholders will be able to subscribe to two new ordinary shares for every three ordinary shares they hold, at a price of €0.75 per share.

This offer price represents a circa 20% discount to the price of €0.93 which, to date, is the trade-weighted average price of the bank’s shares over the last six months.

It also represents a discount of over 50% to the net asset value of the bank’s shares, which as at 30 June 2023 stood at €1.51 per share.

In the case of any eligible shareholders opting not to take up the offer, that amount of shares will then be made available to those shareholders who would have accepted their proportionate entitlement in full.

If excess shares still remain after that, they will be made available to staff and directors of Lombard Bank, employees of the bank's subsidiarty - Maltapost plc - and then shareholders of Maltapost plc.

Lombard Bank said that the rights issue will allow for further strengthening of its capital base both for regulatory purposes as well as for the implementation of its strategy for growth.

This is expected to result in increased profits and, subject to business requirements and regulatory approval, dividend distributions of circa one third of annual profits.