THIS ANNOUNCEMENT DOES NOT CONSTITUTE A SOLICITATION OF AN OFFER TO SELL OR RECOMMENDATION TO PURCHASE THE NOTES REFERRED TO IN THIS ANNOUNCEMENT OR ANY OTHER SECURITIES. THE CONSENT SOLICITATION IS NOT BEING MADE, AND THIS ANNOUNCEMENT SHALL NOT BE DISTRIBUTED, IN ANY JURISDICTION IN WHICH SUCH SOLICITATION OF CONSENTS IS NOT IN COMPLIANCE WITH THE LAWS OR REGULATIONS OF SUCH JURISDICTION.

THIS ANNOUNCEMENT RELATES TO THE DISCLOSURE OF INFORMATION THAT QUALIFIES AS INSIDE INFORMATION WITHIN THE MEANING OF ARTICLE 7(1) OF THE MARKET ABUSE REGULATION (EU) 596/2014 as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018.

23 August 2024

EBN FINANCE COMPANY B.V.
(the "Issuer")

acting in conjunction with
ECOBANK NIGERIA LIMITED
(the "Bank")

COMMENCES A CONSENT SOLICITATION IN RELATION TO THE OUTSTANDING U.S.$300,000,000 7.125 per cent. Senior Note Participation Notes due 2026 (Rule 144A ISIN: US26824MAB63; Reg S ISIN: XS2297197266) (the "Notes") issued by, but with limited recourse to, the Issuer for the sole purpose of financing the purchase of the U.S.$300,000,000 7.125 per cent. Senior Note due 2026 (the "Senior Note") issued by the Bank

Consent Solicitation

Pursuant to a consent solicitation memorandum dated 23 August 2024 (the "Consent Solicitation Memorandum"), the Issuer, at the request of the Bank, is soliciting (the "Consent Solicitation") consents from the beneficial holders of the outstanding Notes (the "Noteholders") to consider and, if thought fit, pass an extraordinary resolution (the "Extraordinary Resolution") at a meeting of Noteholders to be held at 10:00 a.m. (London time) by way of teleconference on 16 September 2024 (the "Meeting") to approve an amendment and waiver related to the Senior Note, as more fully described herein (the "Proposal").  The following table sets out details of the Notes subject to the Consent Solicitation:

1      As at the date of this Consent Solicitation Memorandum.

2      Payable to Noteholders who consent on or prior to the Early Consent Deadline.

3      Payable to Noteholders who consent after the Early Consent Deadline, but on or prior to the Voting Deadline.

The Proposal has been formulated by the Bank and is being proposed by the Issuer at the request of the Bank. None of the Financial Adviser, the Issuer, the Information and Tabulation Agent, the Principal Paying Agent, the Registrar or the Trustee nor any of their affiliates has been involved in the formulation of the Proposal and none of them accepts any responsibility or liability for the sufficiency or adequacy of the Proposal or the legality, validity or enforceability of the Proposal. None of the Financial Adviser, the Issuer, the Trustee, the Information and Tabulation Agent, the Principal Paying Agent, the Registrar nor any of their affiliates makes any recommendation to Noteholders as to whether or not to agree to the Proposal and to vote in favour of the Extraordinary Resolution as set out in the Proposal.

Unless the context otherwise requires, capitalised terms used and not otherwise defined in this announcement have the meanings ascribed to them in the Consent Solicitation Memorandum.

Rationale for the Consent Solicitation

Due to the significant devaluation of the Naira in the first quarter of 2024, which saw the Naira fall from ₦951.79 to the U.S. dollar as at 1 January 2024 to ₦1628.47 as at 31 July 2024, the total capital adequacy ratio of the Bank, as calculated in accordance with the BIS Guidelines, has fallen below 10 per cent as at 30 June 2024, leading to the Bank's capital adequacy ratio falling below the minimum levels required by condition 10(c) (Capital Adequacy) of the Senior Note. A material percentage of the Bank's Risk Weighted Assets were denominated in US dollars as at 31 December 2023, and with its shareholders' equity being denominated in Naira, the rapid devaluation of the Naira against the U.S. dollar caused an inflating effect on the Bank's Risk Weighted Assets, which caused the decline in its capital adequacy ratio.

The impact felt by the Bank on its capital adequacy ratio was equally felt across the Nigerian banking sector.  This prompted the Central Bank of Nigeria (the "CBN") to take a number of steps including requiring banks to take steps to increase their core capital based on certain specified metrics by April 2026. The Bank has since submitted and obtained the CBN's approval and support for its capital remediation plan to address its capital adequacy.

The steps that the Bank has agreed with the CBN and its shareholder, Ecobank Transnational Incorporated ("ETI"), to increase its capital adequacy include the following:

·    In order to meet the CBN's new minimum capital of ₦200 billion, ETI has notified the Bank that it intends to inject U.S.$10 million (approximately ₦16 billion) to close the common equity gap and ensure compliance with the national bank minimum capital requirements by 30 September 2024. Based on the Bank's audited annual financial statements for 2023, the Share Capital and Share Premium are reported at ₦113.7 billion and ₦79.3 billion, respectively, resulting in a ₦7 billion shortfall from the new ₦200 billion minimum capital requirement.

·    In order to restore the Bank's Capital Adequacy Ratio to the regulatory requirement of a National Bank, the Bank intends to:

o  issue approximately U.S.$200 million of AT-1 Bonds approved by the Bank's Board and the CBN, in four tranches of approximately U.S.$50 million each (subject to market conditions), which will enhance the Bank's Tier-1 Capital and improve its capital adequacy ratio;

o  work with ETI to redeem its U.S.$200 million Promissory Notes maturing in 2027 in tranches, which will further lower the Bank's Risk Weighted Assets and improve its capital adequacy ratio. The Bank expects early redemption to occur prior to the contractual maturity of the Promissory Note;

o  drive a reduction of up to U.S.$300 million in the Bank's risk weighted assets through loan sales to eligible third-parties and prepayments by borrowers; and

o  convert up to U.S.$200 million in dollar-denominated loans to Naira and restructure them (when market conditions are favorable) to mitigate the impact of potential currency devaluation and translation issues.

These combined capital remediation efforts are projected to elevate the Bank's capital adequacy ratio to (i) above the levels required by condition 10(c) (Capital Adequacy) of the Senior Note by the Reversion Date and (ii) to 20.36 per cent. (calculated on a pro forma basis assuming all of the above remedial measures were completed as of 30 June 2024).

The Proposal

As such, the purpose of the Consent Solicitation is to seek approval from holders of the Notes of:

(i)   the amendment of the Senior Note to provide for the temporary suspension of the application of condition 10(c) (Capital Adequacy) of the Senior Note until 30 September 2025 (the "Reversion Date") (the "Amendment"), and

(ii)  a waiver with respect to any Potential Event of Default or Event of Default (each as defined in the Senior Note) which may have arisen or may arise under the Senior Note as a result of the failure by the Bank to comply with the provisions of condition 10(c) (Capital Adequacy) of the Senior Note, and a waiver of any rights under the Notes which have arisen or may arise as a result of the occurrence of any such Potential Event of Default or Event of Default (the "Waiver").

Consent Fees

Early Consent Fee

If valid Voting Instructions in favour of the Extraordinary Resolution are received on or prior to 5:00 p.m. (New York City time) on 6 September 2024 (the "Early Consent Deadline"), and are not withdrawn or revoked, subject to the Extraordinary Resolution being duly passed and being implemented in accordance with its terms, the Bank will pay to each such Noteholder who has delivered (and not withdrawn or revoked as aforesaid) such Voting Instruction a consent fee in the amount of U.S.$1.25 per U.S.$1,000 in principal amount of Notes the subject of such Voting Instruction (the "Early Consent Fee") on the Settlement Date.

Late Consent Fee

If valid Voting Instructions in favour of the Extraordinary Resolution are received after the Early Consent Deadline but on or prior to 5:00 p.m. (New York City time) on 11 September 2024 (the "Voting Deadline"), and are not withdrawn or revoked, subject to the Extraordinary Resolution being duly passed and being implemented in accordance with its terms, the Bank will pay to each such Noteholder who has delivered (and not withdrawn or revoked as aforesaid) such Voting Instruction a consent fee in the amount of U.S.$0.50 per U.S.$1,000 in principal amount of Notes the subject of such Voting Instruction (the "Late Consent Fee") on the Settlement Date.

Timetable

The following table sets forth certain key dates for the Consent Solicitation, as described in the Consent Solicitation Memorandum, assuming that the Meeting is quorate on the date on which it is first convened and, accordingly, no adjourned Meeting is required. The actual timetable may differ significantly from the expected timetable set out below. 

Noteholders holding Notes in the Clearing Systems should take steps to inform themselves of and to comply with the particular practice and policy of the relevant Clearing System. Noteholders who are not Direct Participants in the Clearing Systems should read carefully the provisions set out under "Voting and Quorum" below.

The above times and dates are indicative only and will depend, among other things, on timely receipt (and non‑revocation) of Electronic Voting Instructions (for Unrestricted Notes)  or Forms of Sub-Proxy (for Restricted Notes), as the case may be, and the passing of the Extraordinary Resolution.  

If the Meeting is adjourned, the relevant times and dates set out above will be modified accordingly and will be set out in the notice convening such adjourned Meeting.

Noteholders are advised to check with any broker, dealer, bank, custodian, trust company or other trustee through which they hold Notes whether such broker, dealer, bank, custodian, trust company or other trustee would require receipt of any notice or instructions prior to the deadlines set out above.

Voting and Quorum

Noteholders who wish to vote must do so in accordance with the procedures of the relevant Clearing System. Noteholders should note that they must allow sufficient time for compliance with the standard operating procedures of the Clearing Systems in order to ensure delivery of their Voting Instructions to the Information and Tabulation Agent in advance of the Early Consent Deadline or Voting Deadline, as applicable. For more information about how to participate in the Consent Solicitation through the submission of Voting Instructions, Noteholders should read the "Voting and Quorum" section of the Consent Solicitation Memorandum.

The quorum required at each Meeting shall be at least two Noteholders or proxies (each a "voter") representing or holding more than 50 per cent. of the aggregate principal amount of the outstanding Notes, provided, however, that, so long as more than 50 per cent.of the aggregate principal amount of the outstanding Notes is represented by a Global Certificate (as defined in the Trust Deed), a single voter appointed in relation thereto or being the holder of the Notes represented thereby shall be deemed to be two voters for the purposes of forming a quorum.

To be passed in relation to the Notes, the Extraordinary Resolution must be passed at the Meeting or adjourned Meeting, as applicable, duly convened and held in accordance with the provisions of Schedule 5 (Provisions for Meetings of the Noteholders) to the Trust Deed by a majority of not less than 75 per cent. of the votes cast.

If within 15 minutes after the time fixed for the Meeting a quorum is not present, the Meeting may be adjourned for such period, being not less than 14 clear days nor more than 42 clear days, and to such time and place as may be appointed by the chairman (with the approval of the Trustee) either at or subsequent to the Meeting. 

If the Meeting is adjourned for lack of quorum, it is the intention of the Bank to arrange for a notice convening the adjourned Meeting to be sent to the Noteholders as soon as reasonably practicable following such adjournment.

Any Voting Instructions submitted in respect of the Meeting shall (unless revoked) apply to, and be valid for the purposes of, any adjourned Meeting and there shall be no need to submit new Voting Instructions in respect of any adjourned Meeting.

If passed, the Extraordinary Resolution shall be binding on all the Noteholders, whether or not present at the Meeting (or any adjourned such meeting), and each of them shall be bound to give effect to it accordingly.

The Financial Adviser and the Information and Tabulation Agent

Any questions regarding the terms of the Proposal or the Consent Solicitation may be directed to the Financial Adviser at the address and telephone number specified below and any questions or requests for assistance in connection with voting at the Meeting and/or the delivery of Voting Instructions and requests for additional copies of the Consent Solicitation Memorandum may be directed to the Information and Tabulation Agent at the address and telephone number specified below:

The Financial Adviser is:

RENAISSANCE CAPITAL AFRICA

(RENAISSANCE SECURITIES (NIGERIA) LIMITED)

6th floor, East Tower

The Wings Office Complex

17A Ozumba Mbadiwe Avenue

Victoria Island

Lagos, Nigeria

Email: Liability_management@rencapafrica.com

Attention: Liability Management

Telephone: +234 1-4485300; +44 7940766996; +234 706 406 4488

The Information and Tabulation Agent is:

SODALI & CO

Disclaimers

This announcement must be read by Noteholders in conjunction with the Consent Solicitation Memorandum. This announcement and the Consent Solicitation Memorandum contain important information which should be read carefully before any decision is made with respect to the Proposal. Noteholders may, at any time during normal business hours on any weekday (Saturdays, Sundays and bank and other public holidays excepted) prior to the Meeting, obtain copies of the Consent Solicitation Memorandum and certain documents set out in the Consent Solicitation Memorandum from the Information and Tabulation Agent in electronic form at request.

None of the Issuer, the Bank, the Financial Adviser, the Information and Tabulation Agent, the Trustee, the Principal Paying Agent or the Registrar (or their respective directors, officers, employees, agents or affiliates) makes any representations or recommendations whatsoever regarding the Consent Solicitation Memorandum, or any document prepared in connection with it, the Proposal, the Extraordinary Resolution or the Consent Solicitation.

Each Noteholder should take its own independent advice and is solely responsible for making its own independent appraisal of all matters (including the Consent Solicitation, the Extraordinary Resolution and the Proposal including, without limitation, the tax consequences thereof for the Noteholder) as such Noteholder deems appropriate in evaluating, and each Noteholder must make its own decision.

In accordance with normal practice, the Trustee has not been involved in the formulation of the Consent Solicitation, the Proposal or the Extraordinary Resolution outlined in the Consent Solicitation Memorandum and the Trustee expresses no opinion on the merits of the Consent Solicitation, the Proposal or the Extraordinary Resolution nor does it accept any responsibility for the accuracy, validity, correctness or completeness of the Consent Solicitation Memorandum, the Notice of Meeting or any other document prepared in connection with the Consent Solicitation or omissions therefrom.

None of the Issuer, the Bank, the Financial Adviser, the Tabulation and Information Agent, the Trustee, the Principal Paying Agent or the Registrar or any director, officer, employee, agent or affiliate of any such person, is acting for any Noteholder, or will be responsible to any Noteholder for providing any protections which would be afforded to its clients or for providing advice in relation to the Consent Solicitation (including the Proposal) or the Extraordinary Resolution, and accordingly none of the Issuer, the Bank, the Financial Adviser, the Tabulation and Information Agent, the Trustee, the Principal Paying Agent or the Registrar expresses any opinion about the terms of the Consent Solicitation, the Proposal or the Extraordinary Resolution or makes any recommendation whether a Noteholder should participate in the Consent Solicitation or otherwise participate in the Meeting.