Access Bank to seek shareholders’ approval for HoldCo structure
…plans April 15, 2022 listing ...dividend pay-out ratio at 90% ...share price outperforms market with +8.9% returns YtD
The shareholders of Access Bank Plc, Nigeria’s largest bank by asset will on Thursday December 16 at a Court-Ordered Meeting vote for or against the bank’s proposed corporate reorganisation which will result in a new non-operating Holding Company (HoldCo) to be called Access Holdings Plc.
The indicative timeline shows that Access Bank will on December 29 file Scheme Resolution and Scrutineers’ Report with Securities and Exchange Commission (SEC) and notify Central Bank of Nigeria (CBN) of the outcome of the Court-Ordered Meeting.
On February 25, 2022, it hopes to obtain CBN’s final approval of the Scheme; while it also hopes to obtain SEC’s final approval of the Scheme on March 28.
Access Bank will submit application for CBN final licence on March 29, 2022 seeking a final licence to operate as the Financial Holding Company (FHC) of the Bank and other non-banking subsidiaries, after the Scheme becomes effective.
The Bank will apply to be delisted from the Nigerian Exchange Limited (NGX) and the Holdco will be listed on The NGX. The shares of the Holdco will be listed on the Nigerian Exchange Limited on April 15, 2022, the Scheme’s indicative timeline shows. At N9.20 per share which Access Bank closed on December 9, it represents +8.9percent return year-to-date (YtD), outperforming the market’s benchmark index at +3.51 percent same day.
On the Effective Date, each shareholder will receive 1 (one) Holdco share, which will be credited as fully paid, in exchange for every 1 (one) Scheme share as at the Terminal Date. Each Scheme Share will be transferred to the Holdco without any further act or deed by the shareholder.
“The Restructure will result in shareholders holding shares in the Holdco in the same proportion as their current holdings in the Bank and the Bank’s shares being held wholly by the Holdco, which will be a regulated entity for CBN purposes.
The Bank will continue to be subject to the full suite of CBN banking regulations and, in all other material respects. The Banking Subsidiaries will continue to be subject to the oversight of the respective prudential regulatory authorities in their jurisdictions. The Group’s firm-wide risk management framework will continue to apply across the entire restructured group,” Ajoritsedere Awosika, Chairman, Access Bank Plc said in a letter to the bank’s shareholders.
She said the Board considers the terms of the Scheme to be fair, reasonable and in the best interests of the shareholders, “and unanimously recommends that you vote in favour of the subjoined resolution proposed at the Court-Ordered Meeting. It is particularly important that as many votes as possible are cast at the Court-Ordered Meeting to satisfy the Court that there was fair representation of shareholders at the Meeting.”
The Holdco was incorporated with 2 (two) shareholders – Herbert Wigwe (2million units) and Roosevelt Ogbonna (2million units). As at the date of incorporation of the HoldCo – February 10, 2021 – Wigwe and Ogbonna were the only shareholders of the HoldCo. This has not changed.
Pursuant to the Scheme, the 35,545,225,622 ordinary shares of 50 Kobo each of Access Bank Plc held by qualifying shareholders will be exchanged for 35,545,225,622 ordinary shares of 50 Kobo each of Access Holdings Plc. The Share Capital for Access Holdings Plc would amount to N17.772billion.
Access Bank’s shares outstanding of 35,545,225,622 units are valued at N325.238billion. Stanbic Nominees Limited holds 4,091,310,660 units representing 11.51 percent of the bank’s shares outstanding while others shareholders hold 31,453,914,962 units or 88.49percent. Note that Stanbic Nominees held the shares as custodian for various investors. Stanbic Nominees does not exercise any right over the underlying shares.
“If the Restructure is approved, the restructured group will have a structure like that of some major global financial institutions, including those that Access Bank considers to be its peers and competitors. The Board expects that the restructured group will have greater flexibility to adapt to future business opportunities, market and regulatory changes than is currently the case,” Awosika added.
Chapel Hill Denham Advisory Limited is acting as the Financial Adviser in respect of the proposed Scheme of Arrangement (the Scheme). The Solicitors are Aluko & Oyebode and Africa Law Practice NG & Company. The stockbrokers to the Scheme are Coronation Securities Limited while the Registrars are Coronation Registrars Limited.
Kemi Awodein, Managing Director, Chapel Hill Denham Advisory Limited in a letter to Access Bank shareholders said, “Your Board, and we, the Financial Adviser to the Bank, having considered the terms and conditions of the Scheme as well as the benefits thereof, recommend that you vote in favour of the Scheme Resolution which will be proposed at the Court-Ordered Meeting.”
“The statutory requirement to pass the Scheme Resolution at the Court-Ordered Meeting is a majority representing not less than three-quarters (3/4) in value of the Shares of the Shareholders present and voting either in person or by proxy at the Meeting,” Awodein noted.
Awodein further noted that the Holdco Shares to be issued pursuant to the Scheme, will rank pari-passu in all respects and shall form a single class with the existing issued ordinary shares of the Holdco. “Upon the Scheme becoming Effective, the pre-Scheme shareholders of the Holdco will relinquish the shares held in Holdco to the Holdco before the Effective Date”.
Pursuant to the requirements of the Financial Holding Company guidelines, Access Bank has sought and obtained an Approval-in-Principle (AIP) from the Central Bank of Nigeria (CBN) in connection with the Restructuring.
The final licence will be sought from the CBN upon satisfaction of the requirements of the FHC Guidelines and subject to the approval of the terms and conditions of the Scheme by the Shareholders.
Access Bank Holdings Plc would have 100percent ownership in Access Bank and relevant non-banking subsidiaries. The Scheme would be completed in 2022. Dividend pay-out ratio of 90percent was assumed based on pay-out ratio of similar Holding Companies.
The SEC had issued a No-Objection in connection with the Scheme and cleared the Scheme Document. The Order of the Court is pursuant to the provisions of Section 715(3) of the Companies and Allied Matter (CAMA) sanctioning the Scheme.
Access Bank Plc is a leading full-service commercial bank operating through a network of more than 600 branches and service outlets across 12 countries.
Access Holdings Plc will become the listed parent entity of the bank and related group companies. The banking subsidiaries of Access Bank are Access Bank (Gambia) Limited; Access Bank (Sierra Leone) Limited; Access Bank (Rwanda) Plc; Access Bank (Zambia) Limited; Access Bank (R.D Congo) S.A.R.L; Access Bank (Ghana) Plc; Access Bank (Guinea) S.A; The Access Bank (UK )Limited; Access Bank (Mozambique) S.A; Access Bank Kenya Plc; Access Bank (South Africa) Limited; and African Banking Corporation of Botswana Limited.