Access Holdings Rights Issue: N351bn Capital Raise Explained

 

Access Holdings PLC, one of Africa’s leading financial services groups, has started an N351.02 billion Rights Issue to existing shareholders as part of its capital-raising programme. The offer is structured to bolster the company’s financial position, support ongoing working capital needs, and provide funding for organic growth across its banking and non-banking subsidiaries. Here are the key details:

• Issue size: N351.02 billion
• Number of shares offered: 17,772,612,811 ordinary shares of N0.50 each
• Price per share: N19.75
• Qualification date: June 7, 2024
• Offer opening date: July 8, 2024
• Offer closing date: August 14, 2024

Eligibility

The rights issue is open to existing shareholders who held shares as of the qualification date (June 7, 2024). Shareholders will receive one new ordinary share for every two existing shares. All eligible shareholders can now claim their provisional rights allotment by paying for all units or a portion of their allotment before the deadline.

Application Process

Shareholders can apply for the rights issue through their stockbrokers or download the application forms from the company’s website. The rights circular is being distributed to shareholders by the registrars - Atlas Registrars Limited.

Lead Issuing House and Registrars

The lead issuing house for the rights issue is Chapel Hill Denham Advisory Limited, while Atlas Registrars Limited will serve as the registrar for the offer.

Purpose of Rights Issue

The rights issue is part of Access Holdings’ Capital Raising Programme, aiming to generate up to $1.5 billion. The funds will be used to strengthen its financial position, support the company’s growth strategy and working capital needs, and fund organic growth across its subsidiaries, including its wholly-owned subsidiary, Access Bank UK, which is targeting a top 20 ranking and annual profits of approximately $1 billion.

Financial Performance

Access Holdings reported robust results for 2023, including a 335% increase in pre-tax profit and an 87% surge in gross earnings.

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Company Background: Access

Access Holdings PLC, is a leading multinational financial services group that offers commercial banking, lending, payment, insurance, and asset management services. Headquartered in Lagos, Nigeria. the financial conglomerate has grown through strategic mergers and acquisitions, including the notable merger with Diamond Bank in 2019. Access Bank PLC and its subsidiaries[Hydrogen Payment Services Company Limited, Access Pensions Limited, and Access Insurance Brokers Limited] transitioned into Holdings in 2022.  The Access Corporation has a broad footprint across Africa and operates through a network of more than 600 branches and service outlets, spanning three continents, 18 countries, and 49+ million customers, employing more than 28,000 people in its operations in Nigeria alone.

Market Position and Share Performance

Access Holdings has consistently shown strong financial performance. In recent years, the bank's share price has reflected its robust growth strategy and resilience in the market as its shares has shown steady appreciation over the years, driven by its aggressive expansion and diversification strategies.

Profit Potential and Benefits of Investing

Profit Potential: 

Access Holdings has demonstrated significant profit potential, with consistent growth in revenue and net income. The bank's diverse portfolio and strong capital base position it well for future growth.

Investment Benefits: 

Investors can benefit from the bank's strategic expansion, strong management team, and commitment to digital innovation. Additionally, Access Holdings' shares offer attractive dividend yields, providing regular income to shareholders.

Conclusion: Current Rights Issue

Access Holdings is conducting a rights issue to raise additional capital to enhance its operations and support its growth plans. This rights presents an excellent opportunity for eligible investors to buy into a stable and growing financial institution.

 FAQs

How is the right issue structured?

The right issue will be on a 1-for-2 basis, where existing shareholders will be entitled to one new ordinary share for every two existing ordinary shares held as of the qualification date.

What is the outlook for Access Holdings PLC’s banking subsidiary, Access Bank UK?

According to the company’s presentation, Access Bank UK is well-positioned to become one of the top 20 banks, generating profit of about $1 billion annually. The bank is embarking on a capital raising of N351 billion by way of a rights issue to existing shareholders.

What is a Rights Issue?

A Rights Issue is an invitation to existing shareholders to purchase additional new shares in proportion to their existing shares. Access Holdings Plc Rights Issue is on the basis of one new share for every two existing shares (1 for 2), held by existing shareholders as of the qualification date.

How will I know how many shares I am entitled to?

This information is contained in the rights circular sent to you by Atlas Registrars Ltd

Disclaimer:

The content provided in this blog post, "Access Holdings Rights Issue: N351bn Capital Raise Explained," is for informational purposes only and does not constitute financial advice. The analysis and opinions expressed herein are based on publicly available information and our understanding of the subject matter as of the date of publication.

Readers should consult with a qualified financial advisor or conduct their own research before making any investment decisions. The authors and publishers of this blog accept no responsibility for any actions taken based on the information provided. Investing in financial markets involves risks, including the loss of principal, and past performance is not indicative of future results.

This blog post may contain forward-looking statements and projections that are inherently uncertain. No guarantee is made regarding the accuracy or completeness of these statements. The information presented is subject to change without notice.

 

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