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SEC approves extension of Union Bank’s Rights Issue


Tuesday, January 24, 2012 4:13 PM

The Securities and Exchange Commission (SEC) has approved the extension of the Union Bank Rights Issue billed to have ended on January 20. The offer has now been extended till February 10, 2012.


The need to seek for the extension according to a statement from Head, Corporate Affairs Department of the Bank, Mr Francis Barde, stemmed from protests by the Nigeria Labour Congress (NLC), the Trade Union Congress and the Civil Society Groups over the removal of the subsidy on fuel. “The strike slowed us down and make it impossible for most of our shareholders to take their rights,” he said.


Union Bank is offering about 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 October 21, 2011. The application list opened on December 14 2011 and would now remain open till February 10, 2012.


Already, parties to the Union rights issue including the issuing houses, registrars, stockbrokers and officials of the bank in the latest update on the rights have expressed confidence that the issue would be a huge success.


Speaking on the prospects of the Rights Issue being oversubscribed, managing director, Union Capital Markets Limited, the joint issuing house to the rights issue, Mr. Tunde Yamah, said shareholders would be fully allotted their shares and any application for additional shares would be considered, if there is renouncement.


He pointed out that shareholders have been enthusiastic about picking their Rights, noting that the locked in value of discount of not less than 30 per cent and the prospects of increased holdings in a recapitalized leading bank were motivating shareholders.


Yamah added that shareholders who are applying for additional shares stand to earn interest on their return monies if there are no shares for additional allotments.


He said investors who were not earlier qualified for the Rights have been making enquiries on opportunities to buy in through the rights trading, which further illustrate the attractiveness of the offer.


Yamah said that the trading on the rights will open in the last week of the offer period.


According to him, Union Bank’s rights issue is the most attractive offer in the financial markets now with inherent value to yield above money market instruments and other equities.


Managing director, Union Registrars Limited, the registrars to the issue, Mr. Tunde Ayeni, said rights circulars have been distributed to all shareholders while the interface between parties to the issue and shareholders confirmed that most shareholders have received their circulars.


He however, called on shareholders who have any issue to visit any of the branches of the bank or Union Registrars nationwide, noting that the extensive networks of the bank and the Registrars provide access to the 500,000 shareholders of the bank.


Ayeni  added that the bank has also provided extensive communication channels for shareholders to interact with the officials of the bank and parties to the issue in resolving any complaint.


Executive director, corporate, international and investment banking and treasury, Union Bank of Nigeria Plc, Mr. Philip Ikeazor, said the bank would ensure that all shareholders have opportunity to pick their rights.


 “We are desirous and eager to redeem our earlier pledge of giving opportunities to the existing shareholders to take up their rights in line with their clamour to do so during the recapitalisation process,” Ikeazor said.


Citing subscription reports that showed a high enthusiasm among shareholders, he said the Rights Issue has started well and the bank has now firmly been placed on the path towards reclaiming its leadership position.


He pointed out that the rights issue is the last phase of the bank’s recapitalisation programme as the bank has completed other steps including the reconstruction of its shares.


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