Back in October Access Bank concluded plans to commence a rights issue at a price of N8.9. They followed up this announcement with an early release of their 9 months results which was impressive. Before then, they had erred when they suspended their share price in a controversial move that had them incur the scrutiny of SEC. We are now in December and Access Bank rights issue is yet to commence. Meanwhile the likes of Oando have begun theirs after announcing just recently and UBA we hear is set to commence on Monday.
So why hasn’t Access Bank opened its rights issue? I really do not know for sure however, one reason may be the share price. The company earlier announced price of N8.9 which we reviewed here and surely that planned offer price has now been value impaired by the recent sell-offs taking the share price down to as low as N6.13. It is therefore unlikely that anyone, including us, will take up this rights at the earlier proposed price when we can easily scoop it in the market for just over N6. In fact, going by the recent rout of the week just concluded, that price may even drop further and below N6.
The MD of Access Bank has surely not had the best of times this year and will be feeling the heat as every day that passes draws the bank closer to the brink of a risk of not strengthening its CAR. The MD has also been quoted rather errantly when he suggested that the devaluation meant “little or nothing to its financials.” The joke is currently is on Access Bank and it is apparent that their recent quest for a rights issue is perhaps a no issue….at least for now.