Access Bank Plc notified the Nigerian Stock Exchange (NSE) of the cancellation of its previously publicised Extraordinary General Meeting (EGM) scheduled to hold on February 1, 2019 in Lagos, giving no clear reasons.
Access Bank had on December 20, 2018 issued a formal notification of the now cancelled Extraordinary General Meeting.
“We regret any inconvenience that this cancellation may cause our shareholders”, Access Bank said in a Tuesday, January 22 notice at the NSE signed by Sunday Ekwochi, company secretary.
Access Bank Plc would have, among other special businesses slated for the now annulled EGM, been seeking for the shareholders’ approval for the directors to raise additional equity capital of up to a maximum of N75 billion by way of a Rights Issue.
Other special business/ordinary resolutions meant for the now cancelled EGM includes that the bank’s authorised share capital be increased from N20 billion made up of 38 billion ordinary shares of 50 kobo each and 2 billion preference shares of 50 kobo each to N35 billion by the creation of 30 billion ordinary shares of 50 kobo each.
Access Bank Plc and Diamond Bank Plc last month received “No Objection” from the Central Bank of Nigeria (CBN) regarding a potential merger between the two banks, which is expected to complete in the first half (H1) of 2019.
Access Bank said last month it has already finalised terms and obtained regulatory approvals for a Tier-II capital issuance, which will raise $250 million, available for drawdown in January 2019.
The tier-1 lender said it has also obtained “No Objection” from the CBN to undertake a Rights Issue to raise up to N75 billion (about $207 million) in H1 2019. Shareholder approvals and other regulatory approvals are to be obtained before the offer opens.
“This accelerates the capital management plan to support retail growth, previously set out in the bank’s five-year strategy,” Herbert Wigwe, CEO of Access Bank Plc, had said.
Transaction completion is subject to Access Bank and Diamond Bank obtaining shareholder and regulatory approvals – Central Bank of Nigeria, Securities and Exchange Commission (SEC), the Federal High Court (FHC) and the National Pension Commission (PenCom).
The cancelled EGM would have also served as an avenue for the bank shareholders to follow through to the Memorandum of Agreement executed between Access Bank Plc and Diamond Bank Plc on the merger of the two entities.
The signed Memorandum of Agreement and announcement of headline terms which valued Diamond Bank at approximately N72.5 billion will see Diamond Bank shareholders receive N3.13 per share in cash and shares.
If the Rights Issue contemplated is undertaken prior to the implementation date of the merger, the directors of Access Bank would have at the EGM been seeking the shareholders’ nod by way of a placing and subject to obtaining all requisite regulatory approvals, to offer to Diamond Bank shareholders shares in Access Bank to be purchased after the Implementation Date on the same term as the Rights Issue and in the same proportion that they would be entitled to as if they had already become shareholders of Access Bank.
Access Bank had a capital adequacy ratio of 20.1 percent as at September 30, 2018. It is currently concluding a US$250m Tier II capital raising exercise in line with its capital plan to provide a robust capital buffer given the current macro-economic environment.
Iheanyi Nwachukwu
