Union Bank to Use 80% Right Issue Proceeds on Working Capital

Barring all odds, Union Bank of Nigeria Plc will use 80 per cent of its proceed from ongoing Right Issue for working capital, Managing Director, Emeka Emuwa has said.

He disclosed this on Wednesday October 11, 2017 at the Lagos floor of the Nigerian Stock Exchange (NSE).

Emuwa who presented the bank facts behind the offer to the stockbroking community and the financial press said 12 percent will be invested in technology, innovation and digitalization. While 8 percent is for customer touch points.

On the working capital, he said the bank will focus on six priority areas which includes, agriculture, manufacturing, solid minerals. Other areas are services like health, education, construction and real estate, oil and gas. Responding to questions on what percentage will be deployed into manufacturing and agriculture, he said it depends on the opportunities’ that is available before the bank in the economy.

Details of the offer shows that the issued share size is N49.7 billion, number of shares is 12.1 billion ordinary shares of 50 kobo each at N4.10 per share on the basis of 5 new ordinary shares for every 7 ordinary shares held as at August 21, 2017. The offer opens on September 20, 2017 and closes October 30, 2017.

It will be recalled that the bank’s Right Issue subscription of N50 billion commenced on Wednesday, September 20 and will close on October 30, 2017.

Union Bank plans to offer 12.1 billion ordinary shares of 50 kobo each, which was made be available at N4.10 per share, on the basis of five new shares for every seven shares held as at August 21, 2017.

The Bank kicked off a roadshow to sensitize shareholders and at the first event held in Enugu, Chief Executive Officer, Emeka Emuwa, said; “With the commencement of the Rights Issue subscription, we have now officially entered a new phase of our transformation where we will be focused on accelerating business growth to deliver on our objective of becoming one of Nigeria’s leading financial institutions.”

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.