Access Bank is seeking the approval of its shareholders at its forthcoming Annual General Meeting (AGM) in a few weeks time to raise up to 100 billion naira ($505 million) in debt capital via a public offering or a private placement, the bank said on Monday. The shareholder meeting on the proposed debt sale has been fixed for April 27.
Access Bank raised N41.7 billion last year through a rights issue to fund expansion of its branch network and lending. The amount raised was less than the 52.6 billion naira targeted, with analysts citing difficult market conditions.
The bank opened the issue on January 26, 2015 offering a Rights Issue of one ordinary share for every existing three units at a price of N6.90 per share.
The bank said capital raise puts investors firmly at the centre of the its strategy, ensuring sustainable dividends through one of the strongest capital buffers as well as providing the means for further investment to exploit target markets.
Commenting on the result of issue, Group Managing Director of Access Bank, Mr. Herbert Wigwe, said: “We are putting in place the building blocks for our future as we work to becoming a top three bank in Nigeria by 2017. The capital raised will allow us to retain our place amongst Nigeria’s best-capitalised banks and underscores our continued commitment to prudent risk management as we seek growth opportunities both in Nigeria and abroad. This additional capital will allow us to invest in our infrastructure and technology, which will make speed, service and security a guarantee for all our customers, as well as providing the firepower to diversify our geographic focus and target Africa’s fastest-growing industrial sectors”.
Shareholders commend the performance of the bank and ability of its management to consistently enhance the quality and value of their investments, particularly through some of the strategic initiatives and decisions taken in the last couple of years, which signalled the direction the institution is heading.
Roosevelt Ogbonna, an Executive Director of the bank, said the bank was satisfied with the participation of the local investors and promised that the bank will continue to keep the momentum of playing big in the sector.
His words: “The Rights Issue has been completed and we have listed new shares on the floor of The Nigerian Stock Exchange. We are grateful to the strong participation of the local investors.
“We went to the market to raise N52.6 billion but series of impediments like Boko Haram menace, 2014 elections and other sundry issues, which were prevalent at the time, prevented the investment community from actively participating in the Rights Issue”.
He added that the entire N41.7 billion raised was by local investors as only N129 million came through foreign investors. This, he said, shows the confidence the local investors has for the bank.
“We were dogged and clear at what we were doing despite the harsh economic, social and security condition of the company at the time of the Rights Issue. We were excited at the closure of the Rights Issue because it was an opportunity for us to raise more capital. Capital gives us further impetus to engage the market and even raise more money,” he added.
According to the bank, the N41.8 billon, which was realised, accounts for 80 per cent of the total number of new shares offered to shareholders.