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Post-Merger Access Bank Eyes $200m Additional Capital

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  • Post-Merger Access Bank Eyes $200m Additional Capital

Access Bank Plc is planning a rights issue to raise additional capital of about $200 million next year, when it concludes its deal with Diamond Bank Plc, Financial Times has said.

The proposed fund raising, according to the paper, is to keep its capital well above regulatory requirements.

Although efforts to confirm this development were unsuccessful as officials of the bank declined to comment last night, FT quoted bankers handling the rights issue to have said the move would enhance the new entity’s capital base and business development.

The proposed business combination deal between the two banks will result to a combined entity with total asset size of N6.108 trillion.

This, according to the third quarter unaudited results of both banks for the period ended September 30, 2018, means that the new combined entity will have the largest asset size among the banks in the country, thereby displacing Zenith Bank Plc and Guaranty Trust Bank Plc, respectively.

While Zenith Bank reported total assets of N5.618 trillion in its unaudited results for the third quarter of 2018, GTBank’s stood at N3.443 trillion.

Similarly, when the merger deal is concluded, the new institution would hold total customer deposits of N3.543 trillion. This is slightly higher than that of Zenith Bank, which was N3.275 trillion as at the end of September 2018, as well as GTBank’s total customer deposit of N2.239 trillion as at the end of the third quarter of 2018.

In addition, the loan book of the new entity would be N2.703 trillion, higher than that of GTBank, which was N1.270 trillion as at September 30, 2018, and that of Zenith Bank Plc which was N2.066 trillion as at September 30, 2018.

The transaction has been approved by the Central Bank of Nigeria (CBN).

According to a statement from Diamond Bank on Monday, it was expected to be completed in the first half of 2019.

The statement added that the proposed merger would involve Access Bank acquiring the entire issued share capital of Diamond Bank in exchange for a combination of cash and shares in Access Bank via a Scheme of Merger.

Based on the agreement reached by the Boards of the two financial institutions, Diamond Bank shareholders would receive a consideration of N3.13 per share, comprising of N1 per share in cash and the allotment of 2 New Access Bank ordinary shares for every seven Diamond Bank ordinary shares held as at the Implementation Date.

Speaking on Arise TV yesterday, the Chief Executive Officer of Cowry Assets Management Limited, Mr. Johnson Chukwu, hailed the deal.

“Diamond Bank had huge non-performing loans (NPLs) which were weighing down the performance of the bank. And when you have huge NPLs, it leads you to lose your liquidity.

“Diamond Bank was already having some stress as a result of high NPLs. But this for me was one of the easiest and smoothest ways to resolve an emerging banking crisis.

“The reality is that the bank had challenges and took a wise decision, instead of waiting for the central bank to intervene and drive its consolidation. For Diamond Bank, this was a good deal for its shareholders and directors,” Chukwu explained.

On their part, analysts at Lagos-based CSL Stockbrokers Limited, stated that Diamond Bank shareholders stand to benefit considerably from the merger, considering that the offer was at a premium of 260 per cent over the market price as at the date of the final binding offer (December 13) while Access Bank was priced at market price.

The financial advisory firm noted in a report yesterday, that the transaction would be, if it goes ahead seamlessly, a good strategic deal for the shareholders of both entities.

“Diamond Bank shareholders apart from getting a premium at the point of merger over current holdings will also in the long term stand to benefit from expected positive synergies from the merger.

“Access Bank on the other hand stands to benefit considerably from Diamond Bank’s strong retail franchise.

“Diamond Bank has a strong retail franchise especially on the liability side giving it the lowest funding cost among peers.

“A merger with Access Bank, which still has a relatively high funding cost will be positive for Access Bank and in the long run, for the shareholders of the bank,” it explained.

They, however, pointed out that mergers and acquisitions are complex and “we do not expect to begin to see synergic benefits translate into profit in the near term.”

“We also expect that integration issues which are not strange to Access Bank, considering its prior acquisition of Intercontinental Bank, will slow down growth of the combined entity in the near term,” the firm added.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Transcorp Hotels Expand into Marketplace, Launches Aura to Connect People, Hoteliers, Others

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Transcorp Hotels Plc, on Thursday, announced it has launched a new digital platform, Aura, through which people can book accommodation, restaurants and experiences.

Aura, Transcorp’s first in the alternative accommodation segment, is part of the company’s asset-light model, leveraging technology to deliver true hospitality, exciting experiences, and drive shareholder value.

It’s a new dawn in the hospitality industry! I am thrilled to introduce you to Aura by Transcorp, the digital platform we are using to connect people to quality accommodation, great food, and awesome experiences,” Managing Director and Chief Executive Officer of Transcorp Hotels Plc. Dupe Olusola said.

For more than 30 years, Transcorp Hotels Plc has been at the forefront of creating a superior guest experience at our locations. Today, our commitment to innovation has offered us an opportunity to extend this beyond the hotel premises,” Olusola added.

The launch of Aura by Transcorp is one of the most significant developments in the company’s history as it seeks to transform the travel and tourism industry in Africa by focusing on three important components of travel, whether for leisure or business — where you stay, what you eat and how you spend your time. With its people-driven hospitality model, Aura is set to revolutionise travel and help remind Africans of our deep history of hospitality.

Speaking on the launch of Aura, Obong Idiong, Chief Executive Officer at Africa Prudential Plc, Aura’s technology partners, expressed his excitement. “Finding the right accommodation when you travel can be incredibly complex. Options available for the right prices are often limited, and travellers sometimes end up with accommodation that taints the travel experience. Transcorp Hotels Plc has been able to fix that with Aura and we are proud to be associated with them.”

To ensure topnotch user experience, we built a solution to drive digital transformation through the adoption of shared living spaces for the Aura business. With an advanced search algorithm powered by artificial intelligence, Aura determines the relevance of locations taking into consideration, the customers’ preferences and requirements to meet them at the point of their needs,” Idiong added.

Priscilla Adeboye, a travel enthusiast and early adopter of Aura, said the global pandemic has pushed international travel down her list. “But I still want to be able to take some time off work or spend a weekend away from home with the family. I have found incredible homes on Aura that meet my need for space and privacy.

 

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Siemens Energy Nigeria Appoints Seun Suleiman as Managing Director

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Seun Suleiman is the New Managing Director of Siemens Energy Nigeria

Mr. Seun Suleiman is the new managing director of Siemens Energy Nigeria, the company announced on Wednesday.

According to the statement released by the energy company, Suleiman will be responsible for the entire management of operations and decisions on business policies and corporate strategy.

Commenting on his appointment, Suleiman said, “It is an absolute honor to lead the business for Siemens Energy Nigeria and I look forward to delivering on the brand’s promise of excellence.

Suleiman joined Siemens Energy in 2014, bringing over 15 years’ experience and deep expertise in the private sector across Europe and West Africa.

The statement said, “He is an accomplished business strategist and success-driven leader with strong business acumen. Suleiman has also been a core member of the executive management team at Siemens Energy serving in roles as Sales Director West Africa – Service Distributed Generation Oil & Gas and Vice President Service & Digital.

“Prior to this, he also held various functional and managerial positions with ABB Ltd UK, ABBNG Nigeria, Schneider Electric Nigeria and Dresser-Rand Nigeria Ltd.

It added that Suleiman was experienced in establishing operational excellence with specific competence in the power, oil and gas sectors.

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FG Reopens Osubi Airport Warri for Daylight Operations

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FG Reopens Osubi Airport Warri for Daylight Operations

The Federal Government on Monday said the Osubi Airport in Warri has been reopened for daylight operations.

The Minister of Aviation, Hadi Siriki, disclosed this in a tweet.

The airport was closed in February 2020 over mismanagement and debt allegation involving aviation service providers and airport management.

However, Oberuakpefe Afe, a lawmaker representing Okpe/Sapeie/vaie federal constituency, recently moved a motion for the Federal Government through the ministry of aviation and relevant authorities to reopen the airport for flight operations.

On Monday, Hadi Siriki said “I have just approved the reopening of Osubi Airport Warri, for daylight operations in VFR conditions, subject to all procedures, practices and protocols, including COVID-19, strictly being observed. There will not be need for local approvals henceforth.

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