Access Bank HoldCo structure nears as lender eyes matching global peers

Ajoritsedere Awosika, chairman of the board of Nigeria’s tier-1 lender, Access Bank, says the bank intends to restructure into a non-operating financial holding company structure with the banking group and its banking subsidiaries.

In a regulatory disclosure letter she signed and filed to the Nigerian Exchange Limited informing the public of the decision, the bank noted that the proposed restructuring would be implemented through a scheme of arrangements, pursuant to the provisions of Section 715 of CAMA and the SEC Rules and Regulations.

The bank further disclosed that if it gets approval for the proposed restructuring, the emergent 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 Holdco will be a non-operating financial holding company registered and organised in and under the laws of Nigeria, and regulated by the CBN as a non-banking financial institution. Upon the Scheme becoming effective, the Holdco will be the only beneficial shareholder in the Bank. This structure will enable the Group to continue to provide the comprehensive products and services that it is renowned for, and at the same time allow the Holdco to enforce proper governance and risk management across the Group without having any direct operational involvement in the subsidiaries.

“In addition, it is proposed that the Holdco will be a listed company on The NGX, and Shareholders of the Bank will, subject to the terms of this Scheme, receive one Holdco Share for every share they hold in the Bank as of the Terminal Date,” the letter reads.

Shareholders of the bank will hold their shares in the HoldCo in the same proportion as their current holdings in the bank, as well as the bank’s shares being held wholly by the HoldCo, which will be a regulated entity for CBN purposes.

The bank’s disclosure further reads: “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.”

The Access Bank chairman further disclosed in the letter that the board expects that the restructured group will bring about flexibility for adapting to future business opportunities, market and regulatory changes than is the case at the moment.

Ajoritsedere Awosika, while also confirming receipt of the requisite Approval-In-Principle from the CBN and SEC in respect of the scheme, said the scheme will be presented to shareholders for consideration and approval at a Court-Ordered Meeting to be held at bank’s head office on December 16, 2021.

In the meantime, Chapel Hill Denham Advisory Limited has been appointed by the bank to function as the financial adviser to the restructuring, while Coronation Securities and Coronation Registrars will act as the stockbroker and registrars to the new scheme, respectively.

The bank has also appointed PricewaterhouseCoopers as the auditing firm, KPMG Nigeria as the fairness opinion adviser, while Aluko & Oyebode and Africa Law Practice NG & Company will function as solicitors to the scheme.