Union Bank opens N50 billion rights issue today


Union Bank has today opened a N50 billion rights issue. The bank will be selling 12.1 billion ordinary shares at N4.01 per share at the rate of 5 new shares for every 7 held. The Issuing Houses involved in the transaction are Chapel Hill Advisory Partners Limited which is serving as the Lead Issuing House to the Bank; and FSDH Merchant Bank Limited and Stanbic IBTC Capital Limited as Joint Issuing Houses. The rights issue closes on October 20, 2017. The bank, had last month gotten approval from the Securities and Exchange Commission (SEC) to commence with the offer.

Purpose of the fund raise

80% of the funds raised will be applied towards meeting capitalization requirements. MD of the bank, Emeka Emuwa had few months ago hinted that the bank intended raising its capital adequacy ratio from 15% to 205%. The rest of the funds will go towards lending in the agribusiness space.

Union Bank Plc was established in 1917 and listed on the Nigerian Stock Exchange (NSE) in 1971. The Asset Management Company of Nigeria (AMCON) injected N239 billion as capital into the bank in 2011. Union Global Partners Limited (UGPL) bought a 65% stake in the bank in 2012, and Atlas Mara a 20% stake in 2012, from AMCON respectively.

Atlas Mara, which was founded by Bob Diamond and Asish Takkar has expressed interest in acquiring a dominant stake in the bank, recently raising $200 million in fresh funds. Union bank shares closed at N6.00 in yesterday’s trading session on the NSE up 9.09% year to date.

 

by Onome Ohwovoriole, nairametrics.com

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