Indications have emerged that shareholders of Union Bank of Nigeria Plc who picked up their rights in the last Rights Issue carried out by the bank early this year will get their money back.

Our correspondent gathered from sources at the Securities and Exchange Commission on Friday that the shareholders had failed to pick their full portion of the Rights Issue.

A senior official of the SEC, who pleaded anonymity because he was not permitted to speak officially explained that the Rights Issue was only 15 per cent subscribed.

The source said, “The SEC has written the financial advisers of Union Bank and directed that the money raised for the Rights Issue be returned to the subscribers (shareholders). This is because rule 70(6) (iii) (iv) of the SEC, states that the threshold for a successful private placement, public or right issue is 30 per cent. It used to be 25 per cent but was moved to 30 per cent by the new management of SEC.”

The source pointed out that the shareholders could not meet up with full subscription of the Issue even after the SEC extended the Rights Issue.

Currently, the new core investor, Union Global Partners Limited, has 60 per cent stake in the bank, while the Asset Management Corporation of Nigeria owns 20 per cent. The old shareholders of the bank have about 15 per cent.

If the rights issue had been successful, the old shareholders’ stake would have increased to 20 per cent of the total shareholding of the bank.

It was, however, gathered that the core investor would take up the five per cent unsubscribed portion of the rights issue that was apportioned to the shareholders.

The bank offered 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 the October 21, 2011.

The application list had opened on December 14 and was initially scheduled to close on Friday January 20, 2012.

However, with a third of the offer period taken over by yuletide holidays and nationwide protests and strike over the removal of fuel subsidy, the bank applied and secured extension of the offer period to February 10, 2012 from the SEC.

The Rights Issue was supposed to give pre-scheme shareholders more equity stake in the recapitalised Union Bank.

Source: Punch/Ademola Alawiye