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Shareholders of Access Bank have approved the lender鈥檚 N68 billion rights issues.
The approval was got at the group鈥檚 Extraordinary General Meeting (EGM) held in Lagos on Monday.
On completion of the offer, Access Bank鈥檚 authorised share capital would be increased from N13 billion to N20 billion by the creation of additional 14 billion ordinary shares, thereby translating to 38 billion ordinary shares and two billion preference shares at 50 kobo each.
Access Bank said the proposed capital raiser is at N8.90 kobo per share and stated that the forecast price would be anywhere between N13 and N16 and noted the price of the rights issue is below its book value.
The Group Managing Director (GMD) of the bank, Herbert Wigwe, said it took a lot of things into consideration, which included the current Earnings Per Share (EPS) of the stock, the current share price as well as the book price, which is N11 in the determining the price of the rights issue.
He also disclosed that the timing is right as it would give the bank ample time to invest and make good returns for the shareholders.
Mr Herbert also disclosed that the company鈥檚 Return on Equity (ROE) is currently at 18.50 per cent, while its Cost of Capital is about 16 per cent, which he said is an indication of better returns.
The National Coordinator of Independent Shareholders鈥?Association of Nigeria (ISAN), Sunny Nwosu, raised concern about underwriting of the Rights Issue, stating that it is only a public offer that is underwritten and not a Rights Issue.
The GMD noted that the reason the bank is putting up such mechanism in place is to cover for those investors that may not want to take up their rights.
鈥淭he only reason we are putting up such mechanism in place is to cover for investors who may refuse to take up those rights. We will follow best practice in doing all these things,鈥?he noted.
Recall that it was earlier reported that the funds would be used for expansion purposes.
He said: 鈥淣ow to talk specifically, the money that would be raised will be used for the bank鈥檚 expansion. Some will be used as working capital and then in keeping with our international bank and African strategy, we will also continue to expand.鈥欌€? The Nigerian tier one lender said it would open its China unit mid-October, as it seeks expansion to the Middle East and Asia.
Similarly, the lender affirmed it would expand further to Africa targeting viable economies like Kenya and Angola.Related Articles:
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