{"id":446524,"date":"2011-06-23T20:41:52","date_gmt":"2011-06-23T20:41:52","guid":{"rendered":"http:\/\/www.ghanamma.net\/2011\/06\/23\/union-bank-to-complete-recapitalisation-sept\/"},"modified":"2011-06-23T20:41:52","modified_gmt":"2011-06-23T20:41:52","slug":"union-bank-to-complete-recapitalisation-sept","status":"publish","type":"post","link":"https:\/\/www.ghanamma.com\/2011\/06\/23\/union-bank-to-complete-recapitalisation-sept\/","title":{"rendered":"Union Bank to complete recapitalisation Sept"},"content":{"rendered":"
\n

By Omoh Gabriel
LAGOS \u2014 Union Bank of Nigeria (UBN) Plc Wednesday outlined all-inclusive plan to raise between N270 billion and N300 billion required to retain its international banking status, just as it assured all stakeholders that it would complete its recapitalisation process before the September 2011 deadline stipulated by the Central Bank of Nigeria (CBN).<\/p>\n

The fresh capital, which is just an estimate since the bank is still an ongoing concern, would be a combination of both equity from a core investor, Rights issue from existing shareholders and tier 2 capital from AMCON, Group Managing Director of the bank, Mrs Funke Osibodu, told reporters in Lagos at an interactive session.<\/p>\n

Giving an insight into the process of recapitalising, she said: \u201cAs at December 31, 2010, Union Bank, which is one of the eight rescued banks, had negative capital of N182 billion. The Asset Management Corporation of Nigeria, AMCON, which was set up to buy toxic assets from the banks after a debt crisis in 2008 and 2009, had earlier bought bad loans worth N239 billion from the bank.<\/p>\n

\u201cThe recapitalisation process of the bank had advanced and the necessary approval process might be completed in a month to the deadline. The bank would soon sign the Technical Implementation Agreement (TIA), which details the commitments the bank and its potential core investors\u2014 African Capital Alliance Consortium (ACA Consortium) had earlier agreed to, under the Memorandum of Agreement (MoA).\u201d<\/p>\n

She said the bank \u201cwould draw on the three main stakeholders including shareholders, the new core investors and AMCON to raise the outstanding capital\u201d<\/p>\n

According to the plan, out of the estimated amount, \u201cAMCON would inject some funds to bring the bank\u2019s negative shareholders\u2019 funds to zero as at the cut off date; the new core investors would bring $750 million (N114billion), while shareholders would be given opportunity to further invest in the bank through a rights issue\u201d. She allayed fear of possible failure in the reacpitalisation plan, noting that \u201cUnion Bank has done extensive and thorough due diligence on the new investors to ensure that they meet their obligation\u201d.<\/p>\n

The Union Bank boss noted that the institution had always and would continue to involve shareholders in the recapitalisation process. She pointed out that the bank would follow all necessary procedures and regulatory approvals as well as ensure that the valuation of the bank\u2019s share price is fair and transparent.<\/p>\n

\u201cWe expect success because we have carried the shareholders and all stakeholders along by updating them from time to time. We have also created a free channel of communication to enable shareholders raise their concerns and get responses,\u201d Osibodu said. She said by the conclusion of the recapitalisation, Union Bank would have adequate capital to play competitively as an international bank under the new business-based capital requirement regime of the CBN.<\/p>\n

\u201cWe have built enough cushions into our estimates to ensure that whatever the level of subscription to our rights issue, we will still have adequate capital to play as an international bank,\u201d Osibodu said. She pointed out that the confirmatory due diligence that affirmed the core investors\u2019 ability to pay and the readiness of AMCON to inject funds as well as the window of opportunity given to shareholders make an infallible process that would see Union Bank as a leading bank ahead of the September 2011 deadline. Mrs Osibodu said in the case of oversubscription of the rights issue, the bank would absorb the additional capital to further strengthen its operations.<\/p>\n

She explained that the recapitalisation process will not involve cancellation of existing shareholders\u2019 shares but rather new shares would be created and allotted to all parties.<\/p>\n<\/div>\n

Comments are moderated. Please keep them clean and brief.<\/p>\n<\/p>\n

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\nUnion Bank to complete recapitalisation Sept<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By Omoh Gabriel LAGOS \u2014 Union Bank of Nigeria (UBN) Plc Wednesday outlined all-inclusive plan to raise between N270 billion and N300 billion required to retain its international banking status, just as it assured all stakeholders that it would complete its recapitalisation process before the September 2011 deadline stipulated by the Central Bank of Nigeria (CBN). The fresh capital, which is just an estimate since the bank is still an ongoing concern, would be a combination of both equity from a core investor, Rights issue from existing shareholders and tier 2 capital from AMCON, Group Managing Director of the bank, Mrs Funke Osibodu, told reporters in Lagos at an interactive session. <\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-446524","post","type-post","status-publish","format-standard"],"yoast_head":"\nUnion Bank to complete recapitalisation Sept - Ghanamma.com<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ghanamma.com\/2011\/06\/23\/union-bank-to-complete-recapitalisation-sept\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Union Bank to complete recapitalisation Sept - Ghanamma.com\" \/>\n<meta name=\"twitter:description\" content=\"By Omoh Gabriel LAGOS \u2014 Union Bank of Nigeria (UBN) Plc Wednesday outlined all-inclusive plan to raise between N270 billion and N300 billion required to retain its international banking status, just as it assured all stakeholders that it would complete its recapitalisation process before the September 2011 deadline stipulated by the Central Bank of Nigeria (CBN). 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