By Goddy Egene, 07.21.2010
Stockbrokers yesterday urged existing and potential investors in Unity Bank Plc to take advantage of the ongoing Rights Issue of the bank to increase their holdings in order to benefit from the bright future prospects.
The brokers, who spoke during the facts-behind-the-offer presentation by the bank on the floor of the Nigerian Stock Exchange (NSE), said that after seeing the strategies and plans the Board and management of the bank have put in place, investors should see the rights issue price as a big opportunity to increase their holdings so as reap bountiful harvest.
Unity Bank is currently making a Rights Issue of 23.93 billion ordinary shares of 50 kobo each at N1.00 per share on the basis of three new shares for every two shares held as at April 27, 2010. The bank will realise about N23.9 billion from the issue, which is expected to close on July 27, 2010. Doyen of stockbrokers and Managing Director of Clearview Investment Company Limited, Olu Odejimi, said the capital market remains the major avenue for investors to make money by investing in securities of companies and the barometer to measure the performance of the Nigerian economy.
“The stock market is not a casino. There are many investment opportunities in the stock market and the current Rights Issue of Unity Bank is one of them because the price is not only right but also the board and management have good plans for the future of the bank,” he said.Also speaking, the Managing Director of Compass Securities and Investment Limited, Mr. Emeka Madubuike, said that the presentation by Unity Bank unveiled the enormous potential in the bank that was not known to many market operators and stakeholders.
He therefore, urged the management of the bank to sustain the information dissemination, adding that investors should not miss out in the rights issue. Earlier in his presentation, the Managing Director of Unity Bank Plc, Alhaji Falalu Bello, said the Rights Issue is being made to comply with the directive of the Central Bank of Nigeria (CBN) to recapitalise the bank.“The recapitalisation exercise is necessary to enable the bank meet up with the minimum capital adequacy ratio for banks and ensure long-term sustainability of the current operations, expansion of the branch network and dilution of public sector shareholding from the current level of 70 per cent to 25 per cent,” he said.
The Unity Bank boss said 50 per cent of the proceeds of the offer would be used for working capital/project finance, 25 per cent for branch expansion, 10 per cent for technological expansion, 10 per cent for human capital and five per cent for rebranding. Bello said that shareholders’ funds of the bank would hit N40 billion and total assets N405 billion by December 31, 2010.Speaking on the future prospects, the he said that Unity Bank will maintain its all round improvement in operational efficiency.