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Recapitalisation: Access Holdings Announces $1.5b Capital Raising Programme to Boost Operations

The apex bank directed that commercial banks with international operations move their capital base from N50 billion to N500 billion

Access Holdings Plc the parent company of Access Bank PLC, has unveiled its plan to raise $1.5 billion (or N1.963 trillion at the N1309/$ official rate as of Thursday) additional capital to boost its capital base.

New details of the capital-raising plan was announced less than 24 hours after the Central Bank of Nigeria (CBN) directed banks to shore up their capital base.

The apex bank directed that commercial banks with international operations move their capital base from N50 billion to N500 billion; commercial banks with national operations, raise their capital base from N25 billion to N200 billion while regional banks raise their capital base from N10 billion to N50 billion.

The capital raising exercise has a 24-month deadline.

Access Bank, which falls within lenders with international operations, said its capital-raising programme was meant to enhance the group’s financial strength through the issuance of various financial instruments such as ordinary shares, preference shares, Alternative Tier 1 capital, convertible and/or non-convertible debt, bonds or other capital and/or funding instruments, The Nation reports.

“The Programme may be executed through a variety of methods including public offerings, private placements, rights issues, book building processes, or a combination thereof. The specifics regarding the tranches, series, proportions, dates, pricing, tenor, and other terms and conditions that may be associated, will be determined by the Board of Directors, contingent upon securing the necessary regulatory approvals,” the bank said.

Drawing from the Programme, the Group expects to raise up to N365,000,000,000.00 (Three Hundred and Sixty-Five Billion Naira) specifically via a Rights Issue of ordinary shares. The proceeds of the proposed Rights Issue would be used to support ongoing working capital needs including organic growth funding for its banking and other non-banking subsidiaries.

The plans for the Programme were disclosed in the Group’s Notice of the 2nd Annual General Meeting to be held on April 19, 2024 which was published on the Nigerian Exchange portal on March 27, 2024.

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