Home Business & Economy N50bn Right Issue: Union Bank to use 80% as working capital

N50bn Right Issue: Union Bank to use 80% as working capital

N50bn Right Issue: Union Bank to use 80% as working capital

-Targets top tier bank by 2021
Managing Director/Chief Executive Officer, Union Bank Plc, Mr. Emeka Emuwa, has said with the bank’s ongoing N50 billion Right Issue the bank has entered a new phase of banking services.

He also said that the 80per cent of the right issue’s proceed would be used as working capital. This is even as he noted that Union Bank today is a mid tier bank and by 2021, the bank would emerge a top tier bank.In his presentation during the bank’s Fact Behind the Offer Capital Market stakeholders on the floor of the Nigerian Stock Exchange (NSE) concerning the Bank’s ongoing N50 billion Rights Issue, Emuwa said the bank’s customer base increased from 1.7million to 3.6 million presently.

On why investors should, he said, the bank aspire to be the leading mid tier bank come year 2012, adding that the right issue would enhance the bank’s capital base and better position the bank to deliver stronger and sustained shareholder returns.According to him, the right issue will improve the bank’s capital adequacy ratio for long term and build a strong buffer for regulatory requirements, grow risk assets in strategic market segments and sector, thereby enhancing lending capacity.Also he mentioned, “Greater headroom to raise Tier11 capital to further capitalize on carefully selected emerging opportunities as the Nigerian economy continues to recover.

Speaking further, the bank boss maintained that the right issue proceeds would be used to increase that bank’s working capital and grow in strategic area that correspond to emerging opportunities in Nigeria, enhance technological platforms through strategic investments in technology and digitalization.“This year, the bank is a hundred years old and we would not be here without all our stakeholders including our shareholders. As we prepare to launch into the future, we launched our N50 billion Rights Issue in order to raise the capital we require to grow the business and position the Bank as one of Nigeria’s leading financial institutions,” he said.

Executive Director, Market Operations and Technology of the NSE, Ade Bajomo, who represented the CEO of NSE, Oscar Onyema he said “We are pleased that Union Bank has chosen this platform to inform the market of its N50b Rights Issue. Given that the market is driven by timely, relevant and accurate information, interaction with the market through this forum is very welcome and we encourage the Bank to continue.

The subscription period for Union Bank’s Rights Issue commenced on Wednesday, September 20 following the bank’s acquisition of all necessary regulatory approvals from NSE and Securities and Exchange Commission (SEC).During the ongoing offer period which is expected to close on Monday, October 30, 12.1 billion Ordinary shares of 50 kobo each, are available at N4.10 per share, on the basis of five new shares for every seven shares held as at August 21, 2017.The Issuing Houses involved in the transaction are Chapel Hill Advisory Partners Limited which is serving as the Lead Issuing House to the Bank; and FSDH Merchant Bank Limited and Stanbic IBTC Capital Limited as Joint Issuing Houses.

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