Union Bank Seeks N49.75bn Fresh Capital Via Rights Issue

By Nse Anthony-Uko
(Sundiata Finance) – The management of the Nigerian Stock Exchange (NSE) informed the dealing members firms of an application by Union Bank of Nigeria Plc seeking approval to issue and thereafter list new shares valued at N49.75 billion by way of rights.
According to the acting head, Listings Regulation Department at the NSE, Godstime Iwenekhai, the application was submitted through the bank’s stockbroker, Chapel Hill Denham Securities Limited.
The amount to be raised by way of rights of 12.13 billion ordinary shares of 50 kobo each at N4.10 per share on the basis of five new ordinary shares for every seven held by existing shareholders of the bank. The qualification date for the rights issue, the statement noted, is August 21, 2017.
Shareholders of the bank had on May 10, 2017, received shareholders’ approval to raise additional Tier one capital to finance its growth strategy and position as a leading commercial bank in Nigeria, even as they challenged the directors to ensure favourable pricing and timing of the offer to enable them partake of the exercise.
“We are sure that the rights issue if floated at a favourable time will be fully subscribed,” they assured.
The bank’s result for the period ended June 30, 2017 reported a marginal increase in profit before tax of N9.5 billion. The results also showed that the bank recorded gross earnings of N73.7 billion, showing a growth of 23 per cent from N60 billion in the corresponding period of 2016.
In his comments on the results, the chief executive officer of Union, Mr. Emeka Emuwa said, “As our centenary celebrations continue and with the launch of our N50 billion rights issue in the second half of the year, 2017 will remain a very busy year for the bank. With our clear focus on enhancing the operational efficiency of the franchise, gross earnings grew by 23 per cent in the first half of the year to N73.7 billion, from N60.1 billion in H1 2016. In a challenged economy, the group delivered PBT of N9.5 billion, a six per cent growth over the corresponding period in 2016.”

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