A statement from the bank yesterday said with the issue, existing shareholders will now have the opportunity to fully participate in the recapitalisation process of the bank by taking up more shares. At the Extra -Ordinary General Meeting held on 30th September, 2011, the shareholders approved, amongst other resolutions, the rights issuance of 1,407,291,667 ordinary shares to existing shareholders.
The statement added that the unit price would be sold at N6.81 to all qualified shareholders and the offer is from December 14, to January 20, 2012. It explained further that the Rights also give effect to the scheme between the shareholders, AMCON and Union Global Partners Limited which would conclude the recapitalization of union bank. Management of the bank had in October said that the N9.5bn rights issue was part of plans to enable them raise their stake in the bank, following injection of fresh capital by the Asset Management Corporation of Nigeria, which raised the capital base from negative to zero, following which Union Global Partners Limited, the new core investors, invested $500m in Tier 1 capital.
According to the banks Executive Director, Corporate, International and Investment Banking and Treasury, Mr. Philip Ikeazor, the rights issue would ensure that existing shareholders raise their stake in the re-energised Union Bank to 21 per cent. He noted that this will bring AMCONs stake to 19 per cent, leaving the new core investors with 60 per cent. He urged existing shareholders to take up their rates, failing which their stake would drop significantly to 15 per cent. According to the rights circular, shareholders would receive five new shares for every nine reconstructed shares held, at N6.81 per share, same as the price paid per share by African Capital Alliance.