Why Unity Bank Opted For Share Reconstruction

Proshare

December 08, 2006

 

 

<DIV class=MsoNormal style=\"MARGIN: 0cm 0cm 0pt\"><SPAN lang=EN-GB style=\"FONT-SIZE: 10pt; FONT-FAMILY: Arial\">Unity Bank Plc took share reconstruction as a viable option to position for future stability and profitability with a guarantee of good return on investment and consolidate its gains to prepare for listing on the Nigerian Stock Exchange. </SPAN></DIV>

 

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<DIV class=MsoNormal style=\"MARGIN: 0cm 0cm 0pt\"><SPAN lang=EN-GB style=\"FONT-SIZE: 10pt; FONT-FAMILY: Arial\">The bank\'s Chairman, Prof. Akin Mabogunje told shareholders at an extra-ordinary general meeting in Abuja this week that besides that benefit, the reconstruction would give room in the future to raise money from the market without \'ballooning\' the capital structure at a good price. </SPAN></DIV>

 

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<DIV class=MsoNormal style=\"MARGIN: 0cm 0cm 0pt\"><SPAN lang=EN-GB style=\"FONT-SIZE: 10pt; FONT-FAMILY: Arial\">Mabogunje who praised the shareholders\' ardent support for the bank\'s success so far, further noted that although the number of shares held by each shareholder would have been reduced with the reconstruction, their percentage holding and value would still remain the same. </SPAN></DIV>

 

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<P class=MsoNormal style=\"MARGIN: 0cm 0cm 0pt\"><SPAN lang=EN-GB style=\"FONT-SIZE: 10pt; FONT-FAMILY: Arial\">Giving further justification for the exercise before the shareholders approved the board\'s recommendation for the reconstruction, the chairman said; </SPAN><SPAN lang=EN-GB style=\"FONT-SIZE: 10pt; FONT-FAMILY: Arial\">\"The possibility of bonus shares would be more assured under a moderate equity level, and volume of traded shares of the bank would be reduced, hence the share price should be enhanced\". According to Mabogunje, the bank has successfully integrated the technology infrastructure of the nine constituent banks into a common and unified technology platform. </SPAN></P>

 

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<DIV class=MsoNormal style=\"MARGIN: 0cm 0cm 0pt\"><SPAN lang=EN-GB style=\"FONT-SIZE: 10pt; FONT-FAMILY: Arial\">In line with the board\'s recommendation, the 44,210,-684,000 issued and fully paid ordinary shares of 50 kobo each in the capital of the bank were approved for reconstruction into 14,736,894,670 ordinary shares of 50 kobo each by converting the 44,210,6-84,000 issued and fully paid ordinary shares of 50 kobo each into stock of N14.7 billion and re-converting the stock into 14, 736, 894,670 ordinary shares of 50 kobo each. </SPAN></DIV>
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<P class=MsoNormal style=\"MARGIN: 0cm 0cm 0pt\"><SPAN lang=EN-GB style=\"FONT-SIZE: 10pt; FONT-FAMILY: Arial\">The reconstructed shares would be allocated to shareholders in the ratio of one reconstructed ordinary share of 50 kobo each for every three ordinary shares of 50 kobo each previously held. <o:p></o:p></SPAN></P>

 

<DIV class=MsoNormal style=\"MARGIN: 0cm 0cm 0pt\"><SPAN lang=EN-GB style=\"FONT-SIZE: 10pt; FONT-FAMILY: Arial\">The shareholders also approved that the sum of N14, 736,894,670 representing the surplus nominal value of the reconstructed shares be transferred into the share reserve account to form part of the shareholders\' fund. </SPAN></DIV>

 

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<P class=MsoNormal style=\"MARGIN: 0cm 0cm 0pt\"><SPAN lang=EN-GB style=\"FONT-SIZE: 10pt; FONT-FAMILY: Arial\">Further agreed is that the reconstructed 14.7 ordinary shares be re-valued in accordance with the ratio of reconstruction, subject to the appropriate regulatory consents, and be listed on the Nigerian Stock Exchange. <EM>- comet<o:p></o:p></EM></SPAN></P>
<P class=MsoNormal style=\"MARGIN: 0cm 0cm 0pt\"><SPAN lang=EN-GB><o:p>&nbsp;</o:p></SPAN></P>

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