Shareholders Approve Union Bank's Recapitalisation Plan

LAGOS, September 30, (THEWILL) - The banking sector crisis that began two years ago was finally resolved yesterday as shareholders of Union Bank of Nigeria Plc voted overwhelmingly in support of the lender’s scheme of arrangement, paving way for the 94 years old institution to progress with its recapitalization plan.

At the Court Ordered Meeting held in Abuja, 2955 shareholders translating to a total number of 2,174,349,978 shares voted in favour of the scheme. This represents 99.9 per cent of the value of shares of shareholders present at the meeting. Only 189,000 shares voted against the scheme, representing 0.01 per cent of value of shares of shareholders present at the meeting.

Earlier, the shareholders called on every stakeholder to take up their Rights Issue in full so as to preserve their capital value in the bank.

They also commended the board of directors, management and staff of the bank for their efforts and understanding in ensuring that the recapitalization process is realized, and urged them to continually work to add value to the institution.

Upon the scheme coming into effect, existing shareholders would retain 2, 533,125,000 ordinary shares in the recapitalized Union Bank. They would receive three new Union Bank shares in exchange for 16 currently held. It is expected that post-recapitalisation, the value of the recapitalized Union Bank would rise, thereby enhancing shareholder value.

Union Bank has projected profit after tax of N9.2billion, N17.2billion and N19, 4 billion for the years ended December 31, 2002; 2013 and 2014. In view of the forecast, the effect of the scheme on the returns of existing shareholders would be accretive in the medium to long-term.

Responding to shareholders inquiries, the Group Managing Director/Chief Executive Officer, Mrs. Funke Osibodu, appreciated the shareholders for their support and cooperation. She said that the Rights Issue would open in October, following the shareholders and regulatory approval.

At the bank’s Annual General Meeting (AGM) held immediately after the Court Ordered Meeting, shareholders also unanimously endorsed all the special resolutions, including authorizing the board of directors to take all necessary steps to facilitate and give effect to the Transaction Implementation Agreement (TIA) and the Management Services Agreement, among others.