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Access Bank shareholders approve N68bn rights issue

By BusinessNews Staff on October 15, 2014

The shareholders of Access Bank Plc have approved the proposal by the bank’s Board of Directors to raise additional equity capital of up to N68bn by way of rights issue.

The approval was part of special resolutions passed by the shareholders at the bank’s Extraordinary General Meeting, which was held in Lagos on Monday.

The shareholders also passed a resolution “that the authorised share capital of the bank be increased from N13bn made up of 24 billion ordinary shares of 50 kobo each and two billion preference shares of 50 kobo each to N20bn by the creation of 14 billion ordinary shares of 50 kobo each.”

Also, resolutions were passed authorising the ammendment of the Memorandum and Articles of Association of the bank to reflect the changes resulting from the rights issue.

In approving the raising of additional capital, the shareholders authorised the Board to do the rights issue “on such terms and conditions and on such dates as may be determined by the directors, subject to obtaining the approval of relevant regulatory authorities.”

In his address to the shareholders on the proposed equity capital raising, the Chairman, Access Bank, Mr. Gbenga Oyebode, said, “In furtherance of the bank’s objectives of ranking as one of the top three banks in its chosen market, management has identified certain sectors and market segments as growth opportunities for the next five years. In line with the plan, your bank developed a disciplined capital plan to support this growth objective.”

He added that as part of the plan and following the approval of the shareholders, the bank had earlier in the year raised $300m in Tier-2 (debt) capital to create head room for credit growth and extend the duration of the foreign currency balance sheet.

Oyebode stressed that in order to continually support growth over the next five years, enhancement of the bank’s Tier-1 (equity) capital base was critical to the realisation of its objectives.

“The additional capital will enable us to leverage our enlarged balance sheet and optimise returns in a sustainable and risk-controlled manner,” he said, adding that by approving the rights issue shareholders would be supporting the bank to further consolidate its position as a Tier-1 bank “well positioned to achieve its strategic leadership position.”

Before passing the resolutions, some of the shareholders expressed the hope that the bank would not embark on a share reconstruction exercise after the rights issue.

The shareholders were, however, unanimous in approving the resolutions and praised the bank for the growth recorded over the years, stressing that the capital raising exercise was necessary to position the bank for sustained growth.

The Managing Director, Access Bank, Mr. Herbert Wigwe, assured the shareholders that the bank would always ensure that their interests were protected and their concerns duly considered and addressed.

“You have been with us since 2002 and in all our engagements, we have never failed you. Today will be no different,” he said.

Wigwe, who said by the time the offer is finished, Access Bank will become the biggest bank in the country in every parameter, explained that the goal was not just to pay high dividends but to achieve balance, good return on equity and sustained growth.

He also assured the shareholders that the bank would work closely with regulators to ensure that everything regarding the rights issue was done in line with regulatory guidelines.

The Chief Financial Officer, Access Bank, Mr. Seyi Kumapayi, had explained recently that proceeds from the rights issue would be channelled to the telecom, oil and gas, manufacturing and general commerce sectors as well as lending to retail sector.

He added that the bank also planned to focus on electronic branches and expansion, especially to countries such as Ghana, Rwanda and Zambia.

Proceeds from the issue would also be used to replace obsolete equipment and Automated Teller Machines, enhance information and technology infrastructure, and increase working capital.

[Punch]

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