United Bank for Africa Plc has secured the approval of the Securities and Exchange Commission to operate as a commercial bank.

The bank, subsequently, will hold a court-ordered meeting to obtain the approval of shareholders for the restructuring.

A statement by the bank on Friday said all non-commercial banking businesses of the group would be divested and held separately from UBA Plc by the bank’s shareholders under the restructuring.

The divested non-commercial banking businesses (except Africa Prudential Registrars and Afriland Properties that will be held directly by shareholders) will be consolidated within UBA Capital Plc, which is one of the bank’s subsidiaries.

The restructuring will therefore result in the emergence of three separate standalone companies namely, UBA Capital Plc, African Prudential Registrars Plc and Afriland Properties Plc.

The statement said, “The board has proposed that the capital of the bank be reorganised by the reduction of the bank’s accumulated reserves by an amount equal to the aggregate value of the bank’s investment in the non-commercial banking subsidiaries and the excess reality to be transferred to Afriland Properties Plc.”

Explaining the rationale behind the restructuring, the Group Managing Director, Mr. Phillips Oduoza, said the restructuring would result in greater value and provide each entity with easier access to long-term capital to finance growth, thus protecting shareholders’ value.

“Both UBA Capital Plc and Africa Prudential Registrars Plc will eventually become listed companies on the NSE; hence, eligible shareholders will have the benefit of owning liquid stocks in these entities while Afriland Properties will be listed at a much future date,” he added.

Source: Punch (written by Ademola Alawiye)