–Offers 1.41 bn Ordinary Shares Rights to shareholders

By InvestAdvocate

Lagos (INVESTADVOCATE)-Union Bank of Nigeria Plc (UBN) has secured Court approval in its bid to recapitalise the Bank; when a Federal High Court sat in Lagos Thursday and directed that a meeting of shareholders of the Bank be held in Abuja Nigeria on September 30 2011.

This was contained in a Statement signed by the Management of the Bank and made available to InvestAdvocate in Lagos Nigeria.

The Court ordered meeting was for Shareholders to approve the Scheme of Arrangement between the lender and its potential core-investor – the African Capital Alliance Consortium (ACA Consortium).

“This will automatically pave way for Union Bank, which is the only stand alone Bank out of the eight Rescued Banks, to be recapitalised in line Central Bank of Nigeria’s (CBNs) deadline” the Statement said.

Union Bank further affirmed that shareholders of the Bank are expected to approve the new paid up share capital for the lender as well as the ratio of Ordinary Shares to be held by existing shareholders of in the new dispensation.

“Also, they are expected to approve the allocation of shares to the Asset Management Corporation of Nigeria (AMCON), thereby moving the Bank from negative to zero capital” the Statement said.

In the same vein, Shareholders are to approve 1,407,291,667 0rdinary Shares of 50 kobo each to be offered to them by way of a Rights Issue.

As earlier reported, some Shareholders of the Liquidated Banks had resorted to legal interference to stop the Management of these Banks from negotiating with interested investors all in a bid to protect their selfish interests and oil their wheel of greed, disregarding the proviso that that the Regulator would have no option but to liquidate Banks for which negotiation cannot be concluded before the end of the set deadline.

Earlier on, Mustapha Chike-Obi, the Chief Executive Officer (CEO) of Asset Management Corporation of Nigeria (AMCON) had affirmed that if the various opposing Shareholders do not retrace their steps and rethink quickly, their Banks would also be liquidated. “This means that the Shareholders in these Banks will lose their investments” he said.

The Statement affirmed that the remaining five Rescued Banks which had signed Transaction Implementation Agreements (TIAs) with their core-investors, means the conclusion of the process depends on regulatory approval and court ordered Shareholders meeting to endorse and approve the deals.

“The aim was to ensure they beat the Apex Bank’s deadline for recapitalisation and place them in a position to hold Extraordinary General Meetings (EGM)” the Statement said.

The Rescuers of the five banks are Access Bank Plc, (Intercontinental Bank Plc), Eco Bank Transnational Incorporated, (Oceanic), FCMB Plc, (Finbank).

Others are African Alliance Capital (Union Bank) and Sterling Bank Plc (ETB).

This is coming on the heels of a report August 23 2011 by InvestAdvocate and posted on its news website www.investadvocateng.com that Union Bank is awaiting Regulatory approval to commence its proposed Rights Issue as one of the ways the Bank has mapped out to raise funds in order to meet up with the deadline issued by Nigeria’s Central Bank.

Funke Osibodu, Group Managing Director/Chief Executive Officer (GMD/CEO) of the Bank had confirmed this to InvestAdvocate in a telephone chat in Lagos Nigeria; while responding to enquiries on the planned Rights Issue to help the Bank recapitalise; since September 30 2011 is close at hand.

According to her, Union Bank has done all that is required and are awaiting Regulatory approval to commence the Rights Issue.

The other options to recapitalise as earlier reported include the announcement in July that the Bank will receive $750 million fresh funds by a group led by Private Equity Company, African Capital Alliance Consortium (ACA Consortium).

Another is the injection of Capital into the Bank by the AMCON; who will make sure that the Negative Capital of the Bank is restored to zero.

Nigeria’s Securities and Exchange Commission (SEC) had said it will clear the TIA submitted by the remaining five Rescued Banks before the September 30 deadline.

On August 05 2011, the CBN and the Nigeria Deposit Insurance Corporation (NDIC) nationalised three Rescued Banks who were unable to sign the TIA as at the time, these Banks were Afribank, Bank PHB and Spring Bank, and their assets and liabilities were transferred to Mainstreet Bank, Keystone Bank, and Enterprise Bank respectively.

Apart from Union Bank, the other Rescued Banks are Intercontinental Bank, Oceanic Bank, Finbank and Equitorial Trust Bank; all have signed TIAs.