Access Holdings has given reason why it invested over $300 million in Access Bank.
According to Access Holdings, it was for the sole purpose of protecting the bank against insolvency amid a series of acquisitions by the Nigerian lender..
The Company on Tuesday, on the Nigerian Exchange Limited (NGX) announced its completion of a US$300 million capital investment into its flagship subsidiary, Access Bank Plc.
In a statement released on Tuesday, Access Holdings said part of the $300 million was to boost Access Bank’s total capital ratios, which is a measure of how much capital a bank has available to withstand a certain amount of capital losses before being at risk of bankruptcy or becoming insolvent.
The Company Secretary, Access Holdings, Sunday Ekwochi in a signed statement said the proceeds will supplement the capital needs of its African expansion strategy.
According to him, the Investment takes the form of a Tier 1 capital qualifying Mandatory Convertible Instrument and is expected to improve the Bank’s shareholders’ funds and total capital ratios.
“The Central Bank of Nigeria has approved the Investment,” he added.
Commenting on the transaction, Group Chief Executive of Access Holdings, Dr. Herbert Wigwe, in a statement said, “As a leading financial institution in the continent, we remain foresighted in our approach to our growth and capitalization needs.
“This investment is a capstone initiative following the $500 million Additional Tier 1 capital raised by the Bank in 2021 and advances its vision to be the World’s Most Respected African Bank.
“Access Holdings benefits from this non-dilutive approach to raising growth capital as we continue to invest in initiatives geared towards delivering our vision of building a globally connected community and ecosystem inspired by Africa for the World through disciplined growth and diversification.”