Shareholders of United Bank for Africa Plc (NGX: UBA) will consider new capital raise at its upcoming Annual General Meeting (AGM). The 62nd Annual General Meeting of the banking Group will hold on Friday, May 24, 2024 at Transcorp Hilton Hotel, Abuja by 10.00 A.M.
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At the meeting, shareholders will be asked to authorize the Board of Directors to raise additional capital through the issuance of securities comprising ordinary shares, preference shares, convertible and/or no-convertible notes, bonds, or any other instruments, in the Nigerian and/or International Capital Markets, either as a standalone issue(s) or by the establishment of capital raising programmes, whether by way of Public Offerings, Private Placements, Rights Issues and/or other transaction modes, at prices, coupon or interest rates determined through book building or any other acceptable valuation method or combination of methods, in such tranches, series or proportions, within such maturity periods and at such dates and upon such terms and conditions as may be determined by the Board of Directors of the Company subject to obtaining the requisite approvals of the relevant regulatory authorities.
Share Capital of the company will be increased from ₦17.09 billion divided into 34.19 billion ordinary shares of ₦0.50 each to ₦22.50 billion by the creation of 10.80 billion new ordinary shares of ₦0.50 kobo each. The new shares to be created will rank pari-passu with the existing ordinary shares of the Company.
Pursuant to the approval of the capital raise resolutions, Clause 6 of the Memorandum and Article 10 of the Articles of Association of the company will be amended to read as follows;
“The Share Capital of the Company is N22,500,000,000.00 (twenty-two billion five hundred million Naira) divided into 45,000,000,000 (forty-five billion) ordinary shares of 50 kobo each.”
Investogist reported in March that the minimum capital requirements for commercial, merchant and non-interest banks in Nigeria has been raised by the Central Bank of Nigeria (CBN).
For UBA and other commercial banks with international authorization, the minimum capital was raised to ₦500 billion.
A review of the UBA Group’s financial statements for 2023 shows that the bank had as at 31 December, 2023 a share capital of ₦17.1 billion, a share premium of ₦98.7 billion, retained earnings of ₦532.08 billion and other reserves amounting to ₦220.37 billion.
The Directors of the Bank stated that the its eligible Tier 1 capital after deduction of intangible assets, stood at ₦765.36 billion.
However, the CBN directive is that for existing banks, the minimum capital shall comprise paid-up capital and share premium only. The new capital requirement shall not be based on Shareholders’ Fund.
Nnamdi Maduakor is a Writer, Investor and Entrepreneur