Access Holdings opens N351 billion rights issue under new CBN capital rules

Access Holdings opened a N351 billion rights issue on 8 July 2024 after receiving approval from Nigeria's Securities and Exchange Commission (SEC), as the group moves to strengthen its capital base under the Central Bank of Nigeria's (CBN) new minimum capital requirements.

The offer comprises 17,772,612,811 ordinary shares of 50 kobo each, priced at N19.75 per share. Existing shareholders are entitled to one new share for every two shares held as at the qualification date of 7 June 2024. The offer opened on 8 July and is scheduled to close on 14 August 2024. Chapel Hill Denham Advisory is the lead issuing house and Atlas Registrars is the registrar.

RESPONSE TO NEW CAPITAL RULES

The CBN announced revised capital thresholds on 28 March 2024, requiring commercial banks with international authorisation to hold minimum capital of N500 billion, with N200 billion for national banks and N50 billion for regional banks. Banks were given a 24-month compliance window running to 31 March 2026.

Shortly after the CBN announcement, Access Holdings disclosed plans for a capital-raising programme of up to $1.5 billion, including a rights issue of ordinary shares. The group said the programme was intended to enhance its financial strength through the issuance of various financial instruments.

USE OF PROCEEDS

According to the group, the rights issue will boost its financial position and support ongoing working capital needs, while providing funding for organic growth across its banking and non-banking subsidiaries. Access Bank, the group's main subsidiary, holds an international banking licence and therefore falls under the N500 billion threshold.