January 5, 2011
Union Bank’s existing and prospective shareholders who buy into the on-going rights issue of the bank now stand to get approximately 40 per cent return on their investment (year-on-year) as a result of the generous discount made by the bank on the offer.
This was made known by the executive director Corporate, International and Investment Banking,Philip Ikeazor, during a chat with newsmen in Lagos.
According to Ikeazor, there was no investment in the financial market anywhere in the world that would give that rate of return, given the current situation in the money and capital markets.
Ikeazor went on to say the offer was better than any money or capital market investment at the moment. “We are doing this to create value for shareholders and at the same time give them the opportunity to increase their holding in the bank, because Union Bank is desirous and eager to redeem our earlier pledge of giving opportunities to the existing shareholders to take up their rights, in line with our clamour to do so during the recapitalisation process. “This is why we made efforts to ensure rights circulars are sent to the 36 states of the federation and our branches nationwide, so that all shareholders will be able to take their rights or trade it on the floor of the Nigerian Stock Exchange (NSE).”
He disclosed that the rights issue had started well, with a lot of enthusiasm expressed and exhibited by prospective and existing shareholders. The bank is issuing 1.41 billion ordinary shares of 50 kobo each, at N6.81 per share, in the ratio of five new ordinary shares, for every nine ordinary shares held, as at the September 30, 2011 to existing shareholders. The rights issue, which opened December 14, 2011 is expected to close January 20, 2012.
With the Rights Issue, existing shareholders will now have the opportunity to fully participate in the recapitalisation process of the bank by taking up their rights.
Ikeazor said the bank was poised to ensure that its recapitalisation process took its full course for the benefit of all stakeholders, particularly its customers and shareholders.
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.
Ikeazor, called on existing shareholders to take advantage of the opportunity to increase their holding in the bank from 15 per cent to 21 per cent.
He said: “The rights issue is opened for all existing shareholders to take the advantage to own 21 per cent of the bank’s equity. Shareholders groups who are not happy with the way things have been happening with the recent developments in the banking sector should take advantage of this opportunity to be part of a better bank. If existing shareholders fail to take their rights their holding in the bank will remain 15 per cent. They have argued that they were not given the chance to recapitalise their bank this is their opportunity and in any case, if shareholders takes their rights or not we are sufficiently capitalised.