The Corporate Affairs Commission (CAC) has released new guidelines for the recapitalization of banks and other financial institutions in Nigeria.
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The guidelines, issued pursuant to the Commission’s powers under Section 8 (1) (e) of the Companies and Allied Matters Act (CAMA) No. 3 of 2020, aim to streamline the process of recapitalization for these institutions.
The guidelines cover four main areas: new incorporation, increase in share capital, merger, and upgrade or downgrade of license authorization. For new incorporations, the CAC requires an approved name reservation or availability, approval-in-principle from the sector regulator, a duly completed online incorporation form, and payment of stamp duty and filing fees for the category of license authorization. The Commission has pledged to issue certificates of incorporation within 24 hours for applications that satisfy all requirements.
In the case of an increase in share capital, companies have the options of private placements, rights issues, and/or offers for subscription. The required documents include a duly signed company resolution, a return of allotment, a statutory declaration by directors verifying that the issued share capital is fully paid-up, and an affidavit deposed to by a director of the company stating that regulatory approval is required for the increase. The CAC will issue a letter acknowledging the notice of increase and the requirement of regulatory approval, and upon filing of the regulatory approval, a certificate of increase will be issued within 24 hours.
For mergers, the CAC requires duly signed special resolutions for merger by each of the merging companies, a Scheme of Merger approved by the Securities and Exchange Commission (SEC), certified true copies of court orders authorizing Extraordinary General Meetings (EGM) of each of the merging companies, evidence of publication of court-ordered meetings in two newspapers and the Federal Gazette, and a certified true copy of the court order sanctioning the Scheme of Merger.
The guidelines also state that no consequential filing is required for the upgrade or downgrade of license authorization. The CAC has provided an email address and a phone number for enquiries and complaints related to these guidelines and applications submitted in pursuance of the recapitalization exercise.
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