By Chris Ikebude InvestAdvocate

Lagos (INVESTADVOCATE)-There are indications that the ongoing Rights Issue of Union Bank of Nigeria Plc (UBN) maybe oversubscribed as Shareholders of the Bank are picking up their Rights.

Feelers from stakeholders to the Rights including the Issuing Houses, Registrars, Stockbrokers and Officials of the Bank from their current analysis on the Rights have affirmed confidence that it would be a huge success.

From the timetable of the Rights Issue Circular made available to www.investadvocateng.com, receiving agents will make returns on February 03 2012; while the parties would forward the allotment proposal to the Securities and Exchange Commission (SEC) late February; Union Bank is expected to receive the net proceeds of the Rights Issue by March 2012.

Tunde Yamah, Managing Director (MD) of Union Capital Markets Limited, Joint Issuing House to the Rights while reacting to the issue of oversubscription said shareholders would be fully allotted their shares and any application for additional shares would be considered, if there are renouncements.

He affirmed that shareholders have been enthusiastic about picking their Rights, “the locked in value of discount of not less than 40 percent and the prospects of increased holdings in a recapitalised leading Bank were motivating shareholders” he said.

Shareholders who are applying for additional shares stand to earn interest on their return monies if there are no shares for additional allotments” Yamah said.

He further affirmed that 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.

“Trading on the Rights will open in the last week of the offer period” he said.

According to Yamah, Union Bank’s Rights Issue is currently the most attractive offer in the Financial Markets with inherent value to yield above Money Market instruments and other Equities.

In the same vein, Tunde Ayeni, MD Union Registrars Limited, the Registrars to the Issue 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.

“Shareholders who have any issue should visit any of the branches of the Bank nationwide or Union Registrars, extensive networks of the Bank and the Registrars provide access to the 500,000 shareholders” Ayeni said.

According to him, the Union 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.

Also, Philip Ikeazor Executive Director (ED) Corporate, International and Investment Banking and Treasury of Union Bank 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.

The Bank late December 2011 said Shareholders whose names appear on the Bank’s Register as at the time of the conclusion of its share reconstruction will enjoy a 40% discount if they pick up their Rights.

The Bank on December 14 2011 opened a Rights Issue following the approval of Nigeria’s SEC.

Union Bank had on September 09 2011 at a parley with the Media said existing shareholders will own 21% Equity stake at the end of its recapitalisation exercise compared to 6.8% formerly held; indicating an increase of 208.82%.

The Bank seeks to raise a little over N9.0 billion and Lead Issuing House to the Rights is Chapel Hill Advisory Partners Limited; while Joint Issuing House is Union Capital Markets Limited. Application list closes January 20 2012.