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The New Union Bank Transaction – Matters Arising

Category: Mergers & Aquisitions


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The New Union Bank Transaction – Matters Arising

 

Monday, October 10, 2011 1:00 PM

 

 

The news obtained from Thisday newspaper this morning has attracted a number of interests from investors.

 

From the information contained in the foregoing, the interpretation of which has been that the new investors/owners are treated far better than the old/original owners.

 

Going through the various commentaries and newspaper publications, we have published some of the questions sent in by a regular subscriber for which further clarification is sought by him.

 

 

Questions Arising Therefrom: 

 

1. How much is outstanding in the bail-out fund given to Union Bank by the CBN?

 

2. How much has AMCON pumped into Union Bank and in exchange for what?

 

3. The 19% equity holding being given to AMCON is in exchange for what?

 

4. If the NSE cancelled the existing 13,510,000,000 shares and 2,533,125,000 new shares are listed and going by the new thinking represent 15% of the new Union Bank, how did the management arrived at 1,407,291,667 as right issue with a claim of 6% to the new Union Bank?

 

5. If according  to the statement credited to management the right offer price of N6.81 is at a discount of N4.72, that technically means the share price of the new Union Bank is N11.53, what unit price was then used for the 60% & 19% equity stake given to Union Global Partners Limited and AMCON?

 

6. If Union Global Partners Limited are to provide USD500M for 60% equity stake in the new Union Bank, what nominal value of shares is this 60% equity holding?

 

7. What are the terms of the USD250M Tier 2 capital being injected by Union Global Partners Limited?

 

8. Why is the purpose of the pre-emptive caveat "there is also a standby investment arrangement to be provided by AMCON to cover any shortfall in the equity investment amount by Union Global Partners within 90 days"?

 

9. What is the minimum fresh cash injection Union Global Partners Limited MUST put down in order to be a part of this transaction?

 

Ade Kehinde can be reached on adetiti_kehinde@yahoo.co.uk

 

Info@proshareng.com

 

References:

1.    Recapitalisation: Union Bank Rights Issue Opens This Week

2.    COMMENT - Issues in Banks' Recapitalisation EGMs

3.    BREAKING NEWS: Union Bank meets regulatory deadline on capital adequacy

 



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