Access Holdings will tap the private placement market to draw privileged investors to its new capital raise programme, through which it plans to mobilise N40 billion in foreign currency, following an emergency general meeting on Thursday.
The proposed share sale gives room to one or more or two investors to acquire the shares at N20.25 each in accordance with terms and conditions to be set later, Nigeria’s biggest banking group said in a statement.
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“The board of directors be and is hereby authorised to consider, negotiate, approve, and finalise the list of potential private placement investors; determine the structure, valuation, modalities, and timeline for the private placement,” it stated further.
Access Holdings requires key approvals from the Central Bank of Nigeria and the market regulator, the Securities and Exchange Commission, to initiate the capital raise.
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Taking advantage of the issuance of dollar-denominated instruments to facilitate expansion into new markets has been a key consideration for the group since it unveiled its medium-term growth strategy to journalists in Lagos last October.
Roosevelt Ogbonna, the CEO of Access Bank’s commercial banking unit, said at the time that the lender is considering issuing the securities in two tranches – the first to development finance institutions and the second in the open market.
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A looming deadline for banks in Nigeria to increase their regulatory capital to new limits by next March is compelling lenders to make last-ditch efforts to source fresh cash to shore up their core capital to the stipulated levels or resort to less favourable options, such as mergers, to stay in business.
As of last December, Access Bank had met the N500 billion minimum capital requirement for international banking authorisation, the license category to which it belongs, after mobilising the sum of N351 billion through a rights issue.
Raising that cash from existing shareholders lifted its share capital to N600 billion, according to a statement on its website.
The private placement will issue 2 billion shares in all, Access Holdings said. That will take its outstanding shares to 55.3 billion.
The group’s market capitalisation at market close on Friday stands at N1.1 trillion.
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