By Dipo Olowookere
Subscription for the N239.4 billion rights issue of United Bank for Africa (UBA) Plc is commencing today, Friday, November 15, 2024.
The bank is offering to its shareholders one new share for five existing shares in a bid to further strengthen its regulatory capital and positions for growth in lending, digital banking and unique diversified global banking strategy.
From the exercise, the company is offering 6,839,884,274 ordinary shares of 50 Kobo each at a unit price of N35.00 for shareholders of the lender as of Tuesday, November 5, 2024.
The issuance is in compliance with the revised minimum capital requirements for Nigerian commercial banks announced by the Central Bank of Nigeria (CBN) earlier this year.
According to the Chairman of UBA, Mr Tony Elumelu, proceeds from the rights issue will be used to “expand the group’s lending capacity, investment in digital infrastructure, support sustainable business practices and expanding the group’s African operations.”
A rights issue is an exercise designed to allow existing shareholders of a company to increase their stake, usually at a discounted price.
For UBA, as Mr Elumelu said in his letter to the shareholders, the primary objective of this rights issue is to “further strengthen our capacity to take advantage of growth opportunities and sustain our leadership in the banking industry.”
Business Post gathered that application for the provisional allotment of the rights to the new ordinary shares will be made exclusively through the Nigerian Exchange (NGX) Limited e-offer portal, NGX Invest, during the offer period, while existing shareholders may also apply for additional shares above their provisional allotment as described in the Provisional Allotment Letter.
However, shareholders who are customers of the bank have been encouraged to access their rights through UBA’s internet banking and mobile banking channels.
Recall that at the Annual General Meeting (UBA) of UBA held in May 2024, shareholders authorised the board to establish a N400 billion Equity Shelf Programme. The rights issue is the first step in its broader capital raising programme.
UBA is one of the companies driving economic growth across Africa and has consistently demonstrated growth and resilience, evidenced by its strong financial performance and recent recognition within the industry.
“Our historic partnership with the Africa Continental Free Trade Area (AfCFTA) Secretariat, where UBA pledged up to $6 billion in financing over the next three years to support eligible SMEs across Africa underscores our commitment to fostering economic development,” the chairman of the firm said.
