Access Holdings has received the approval of the Securities and Exchange Commission to extend its ongoing rights issue programme to August 23.
The programme was initially due to close on August 14.
According to the corporate disclosure by the group on the NGX website, the decision was made in response to the recent nationwide protests that disrupted businesses and daily activities across Nigeria. It was noted that the extension was to give shareholders additional time to subscribe to their rights.
Access Holdings is presently carrying out a N351 billion rights issue programme which began on July 8, 2024. The group is issuing 17,772,612,811 ordinary shares at the rate of two new shares for every share held by existing shareholders. The offer price for the rights issue is N19.75.
Challenges with the rights issue
Access Holdings is facing the most significant challenge among all the banks currently embarking on capital raises. Since placing the offer price for its rights issue at N19.75, the bank’s market share price has not hit N19.75.
On July 8, Access Holdings was trading at N19.60, however, the share price declined further, going as low as N18.30 on July 31. However, from the start of August, the share price has been trying to make a resurgence above the rights issue price.
In defending the rights issue share price, the Chairman of Access Holdings, Aigboje Aig-Imoukhuede noted that Access Holdings’ earning potentials warranted such a valuation.
He noted during the bank’s “Facts Behind the Issue” presentation, “Currently, the analysis shows a potential earnings value of about 17 naira per share, with a trading price of around 19.75 naira per share. This is not a bank that needs further reinvestment to make that money, meaning it won’t seek additional capital that could dilute its earnings.”
To market its rights issue, Access Holdings took a different approach by trying to tap the influence of social media. The group tried a Twitter campaign utilizing influencers, however, not without drawing the ire of some commentators.
Fidelity Bank also extended its combined offer from July 29 to August 12. However, the bank also increased the number of shares offered, a pointer to a potential oversubscription.
In Access Holdings’ case, there will be no increase in the number of offered shares, as there is very little pointer to a potential oversubscription.
