Access Holdings’ N351b Rights Issue Poised To Profit Investors

In a bold move to bolster its financial position, Access Holdings Plc, one of Nigeria’s most prominent financial institutions, has launched a N351 billion rights issue, marking a significant step in its ongoing capital raising programme.

The rights issue is part of a broader $1.5 billion capital raising initiative, which the company plans to execute through a combination of equity, quasi-equity, and debt issuances.

This development comes in the wake of the Central Bank of Nigeria’s (CBN) announcement of a two-year bank recapitalisation exercise, which began on April 1, 2024, and is slated to conclude on March 31, 2026.

Access Holdings’ rights issue, which offers 17.772 billion ordinary shares at 50 kobo each to existing shareholders at N19.75 per share, opened on July 8, 2024. Originally set to close on August 14, 2024, the offer period has been extended to August 23, 2024, following approval from the Securities & Exchange Commission (SEC).

The extension was a strategic response to recent nationwide protests that disrupted business operations, ensuring that shareholders have ample time to participate in the capital raising exercise.

The rationale behind this massive capital raise is clear; Access Holdings aims to fortify its capital base, which is essential for its continued expansion and ability to seize emerging opportunities in Nigeria’s dynamic financial sector. The funds generated from the rights issue will be used to support ongoing working capital needs, including organic growth funding for both the banking and non-banking subsidiaries of Access Holdings.

This move aligns with the CBN’s recapitalisation plan, which requires commercial banks with international licenses to maintain a minimum capital of N500 billion, while those with national and regional licenses need N200 billion and N50 billion, respectively. The recapitalisation also extends to Merchant Banks and Non-interest Banks, with baseline capital requirements set at N50 billion for the former and varying between N10 billion and N20 billion for the latter, depending on the scope of their operations.

For investors, the rights issue presents a unique opportunity. By purchasing additional shares at a discounted price, shareholders can potentially enhance their investment returns as Access Holdings continues to grow and expand.

The company’s Chairman, Mr. Aigboje Aig-Imoukhuede, emphasised that this capital raise is a testament to the strong bond between the group and its shareholders. He assured investors that the additional capital will enable Access Holdings to maximise emerging opportunities and deliver long-term value.

The benefits of this rights issue are not lost on the shareholders. Various shareholder groups have expressed their optimism, highlighting Access Holdings’ strong track record of growth and profitability.

Chief Sunny Nwosu, founder and former National Coordinator of the Independent Shareholders Association of Nigeria (ISAN), confidently predicted that the rights issue would be oversubscribed, citing the bank’s consistent performance and ability to exceed investors’ expectations.

Similarly, Mrs. Bisi Bakare, the National Coordinator of the Pragmatic Shareholders Association (PSAN), praised the bank’s consistent dividend payments and robust financial performance, urging shareholders to take advantage of the offer.

Access Holdings’ ambitious growth plans further highlight the strategic importance of this capital raise. The bank under the leadership of Mr. Roosevelt Ogbonna, Chief Executive Officer, has set its sights on becoming one of the most respected banks globally. With plans to grow its customer base to 125 million by 2027 and establish a presence in at least 26 countries, including key markets in the OECD, the United Kingdom, France, and the United States, Access Holdings is positioning itself as a global financial powerhouse.

To support this growth, Access Holdings is investing heavily in infrastructure and technology, with a focus on improving service delivery across its operations. The bank’s recent partnerships with Safaricom Plc and M-PESA Africa to expand cross-border money solutions in Africa, as well as its collaboration with MasterCard to create a payment infrastructure for international transactions, highlight its commitment to leveraging technology for growth.

This rights issue marks a significant milestone in Access Holdings’ journey, offering both existing shareholders and new investors a chance to be part of a financial institution that is not only growing but is also reshaping the banking landscape in Nigeria and beyond.

As Access Holdings continues to build on its successes, the future looks promising for its investors, who stand to gain from the bank’s strategic expansion and commitment to delivering superior returns.