Access Bank holds court-ordered meeting on Scheme of Arrangement for restructure
Access Bank held its Court-Ordered Meeting of Shareholders yesterday to consider the Scheme of Arrangement that was earlier released to the shareholders and investing public last week.
At the meeting, the Chairman of the Bank, Dr Ajoritsedere Awosika stated that the meeting conveyed was pursuant to the order of a Federal High Court on the 19th of November, 2021 to enable shareholders to consider the proposed Scheme of Arrangement.
According to the Chairman of the bank, the reason for the scheme includes limiting the exposure of banks to higher operating risks and reducing the propensity to put depositor’s funds to risky non-banking businesses.
Also, the HoldCo structure will ring-fence each business from the risk of the other by preventing the business performance of one business from affecting the performance and evaluation of another. Under the structure, she continued, the assets of the bank are ring-fenced from the non-banking business.
Furthermore, she communicated the benefits and effects of the scheme to shareholders present and those watching virtually stating the benefits as:
Growth facilitation and expansion in banking across Africa, Better positioning to deal with emerging competition; More focused regulatory oversights on the various arms of the group, Ring-fencing each business from the risk of the other. Facilitating a consolidated financial strength of the group which will improve access to ability to raise capital.
Commenting on the effects of the scheme, Dr Ajoritsedere said that the board considers the scheme as an appropriate strategic move crucial to the growth of the group. She said, “The board considers this scheme to be the most appropriate approach to create greater strategic flexibility and diversification of the group’s revenues.”
The scheme will result in shareholders holding shares in 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 Managing Director of the Bank, Herbert Wigwe, commented on the scheme saying that “the scheme symbolizes a great future that the company wants to create. We have to continuously evolve and create a construct that will ensure that there is proper oversight over the subsidiaries.”
He further states that this move shows that the institution is evolving into a larger and different type of institution that will try to optimize and provide greater values to shareholders as it moves to the next level.
Conclusively, he mentioned that there will be boards at the subsidiary levels (for all subsidiaries), at the bank level, and also at the Holding company level to ensure that best practices will be followed and stringent governance standards will be maintained to avoid conflicts.
