Access Holdings to raise staggering N365 billion in right issue

Access Holdings to raise staggering N365 billion in right issue

Access Holdings, one of Nigeria’s largest financial institutions, has announced plans to raise a staggering N365 billion (Three Hundred and Sixty-Five Billion Naira) through a rights issue.

The company is also seeking a combined capital raise of up to $1.5 billion via equity, quasi-equity, and debt issuances.

This strategic move is expected to fortify the bank’s capital base, supporting its continued expansion and its ability to seize emerging opportunities in the financial sector.

The details of this planned capital raise were made public in a notice about an upcoming Annual General Meeting, which was disseminated via the Nigerian Exchange Group (NGX).

Rights Issue Details
As part of this monumental rights issue, Access Holdings (aka Access Corporation) will see an expansion in its issued share capital from N17,772,612,811.00 , divided into 35,545,225,622 ordinary shares, to N26,658,919,216.50.

This expansion is facilitated by the creation of an additional 17,772,612,811.00 ordinary shares, each priced at N0.50 Kobo, which will rank pari-passu with the existing shares of the company.

The capital raise of N365 billion through a rights issue is set to occur on dates and under terms specified by the Directors, subsequent to obtaining approvals from relevant regulatory bodies.
This strategic financial maneuver is anticipated to assist Access Corporation in more effectively navigating the competitive landscape of the banking industry, with an enhanced ability to invest in technology, infrastructure, and human capital.
It also positions them advantageously ahead of an imminent announcement by the central bank to increase bank share capital to approximately N500 billion.
Board’s also seeking to raise $1.5 billion
Moreover, the Board of Directors is also seeking the authority to embark on a capital raising programme of up to US$1,500,000,000.00 (One Billion, Five Hundred Million United States Dollars) or its equivalent.

This programme may involve the issuance of ordinary shares, preference shares, Alternative Tier 1, convertible and/or non-convertible notes, bonds, or any other instruments.
The offerings could be conducted through a public offering, private placement, rights issue, book building process, or any combination thereof, subject to necessary regulatory approvals. T
he details regarding the tranches, series, proportions, dates, rates, maturity periods, and terms and conditions will be determined by the Board.
What this means
Access Holdings, following the announcement of its fiscal year 2023 results, has disclosed a total share capital of approximately N2.1 trillion. Within this share capital, retained earnings amount to about N715 billion, alongside “other components of equity” totaling around N936.7 billion.

The company is poised to embark on a capital raise that constitutes about 17% of its total share capital, a figure that notably exceeds its current share capital and premium, which stands at N251.8 billion.
In the wake of these developments, the company’s share price saw an uptick, closing at N24 on Wednesday, reflecting a 3.9% increase.
This rise comes in the aftermath of Access Holdings announcing a profit after tax of N612.4 billion for the year ended 2023.
Access Holdings, with its subsidiaries spread across various African nations, continues to strategically focus on inorganic acquisitions as a pivotal component of its growth strategy.
This approach to raise capital highlights the company’s ambition to expand its footprint and enhance its market presence across the continent, leveraging acquisitions to fuel its growth ambitions effectively.