In a bid to beef up the capital base of Union Bank Plc, its management has headed to the capital market to shop for N50 billion. The bank has, therefore, opened a N50 billion rights issue to that effect. 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 rights issue closes on October 20, 2017. The bank recently obtained approval from the Securities and Exchange Commission, SEC, for the offer.
About 80 per cent of the funds raised will be applied towards meeting capitalization requirements. Emeka Emuwa, managing director of the Union Bank, had few months ago hinted that the bank intended raising its capital adequacy ratio from 15 per cent to 205 per cent. 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 per cent stake in the bank in 2012, and Atlas Mara a 20 per cent 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.