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Union Bank Shareholders to Meet Sept. 30 on core Investor

By on September 3, 2011

Union Bank Nigeria Plc (UBN), a lender bailed out by the central bank in 2009, said shareholders would meet on Sept. 30 to approve an agreement between the bank and its core investor, African Capital Alliance Consortium.

Shareholders will discuss the number of shares to be held by existing investors in the bank, the Lagos-based lender said in an e-mailed statement today. They will also be asked to approve a rights offer that would raise 10 billion naira ($65 million), according to a separate statement published in the Guardian newspaper.

Union Bank will ask its investors to approve cutting share capital to 1.3 billion naira by canceling about 11 billion shares, according to the e-mailed statement. Shareholders will be asked to agree to a plan by the Asset Management Corp. of Nigeria to put more funds in Union Bank, taking its assets to zero, before Union Global, a member of the African Capital Alliance, injects $500 million.

Union Bank was one of the eight lenders whose chief executives were fired by the Central Bank of Nigeria in 2009 after a lending crisis threatened to collapse some of the lenders in Africa’s largest oil producer. The central bank bailed out some banks with 620 billion naira and created the asset management company, known as Amcon, to buy non-performing loans of the banks. This year, the eight bailed-out lenders were given a Sept. 30 deadline to recapitalise or face liquidation or nationalization.

Bloomberg