- Safiu Kehinde
United Bank for Africa (UBA) Plc has announced plan to raise N239.4 billion through Rights Issue to shareholders.
This was disclosed in a statement issued on Thursday and made available to NPO Reports.
According to the statement, the Rights Issue, which opened on Friday, November 15, 2024, will gives existing shareholders the opportunity to purchase additional 6,839,884,274 ordinary shares of 50 kobo each at N35.00 per share in proportion to their current holdings.
It is being offered on the basis of one new ordinary share for every five existing ordinary shares held by shareholders, as of November 05, 2024.
The Group Chairman of United Bank for Africa, Tony Elumelu, informed the shareholders in a letter that the decision emerged out of the resolution of the Group’s Annual General Meeting held in May 2024 where the establishment of the N400 billion Equity Shelf Programme was authorized and was agreed upon that UBA will embark on a Rights Issue as the first step in its broader capital raising programme.
“UBA’s Rights Issue aims to raise N239.4 billion, through the issuance of new Ordinary Shares to our 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,” Elumelu said.
Explaining the use of proceeds, the Group Chairman noted that, beyond regulatory compliance, the funds will expand the Group’s lending capacity, investment in digital infrastructure, support sustainable business practices and expanding the Group’s African operations.
Elumelu also highlighted how UBA is driving economic growth across Africa. “Our historic partnership with the Africa Continental Free Trade Area (AfCFTA) Secretariat, where UBA pledged up to US$6 billion in financing over the next three years to support eligible SMEs across Africa underscores our commitment to fostering economic development”.
The issuance is in compliance with the revised minimum capital requirements for Nigerian commercial banks announced by the apex banking regulator in Nigeria – the Central Bank of Nigeria (CBN) earlier this year.
According to the statement, UBA has consistently demonstrated growth and resilience, evidenced by the Group’s strong financial performance and recent recognition within the industry. UBA’s progressive dividend policy, which has seen an increase by 14.8% annualised dividend yield has demonstrated the Group’s ability to reward shareholders consistently.
In 2023/2024, UBA won “Bank of the Year” Awards in eight of its subsidiaries – Cameroon, Chad, Ghana, Cote d’Ivoire, Mozambique, Republic of Congo; Sierra Leone; Tanzania, as well as the Regional Award for Africa and in 2024 has won World Best Frontier Markets Bank and Best SME Bank Africa.
Meanwhile, application for the provisional allotment of the Rights to the new ordinary Shares will be made exclusively through the NGX e-offer portal during the offer period, while existing shareholders may also apply for additional shares above their provisional allotment as described in the Provisional Allotment Letter.
Shareholders who are customers of the Bank are also encouraged to access their Rights through UBA’s internet banking and mobile banking channels.