Africa News Union Bank of Nigeria Shareholders Meet to Restructure Balance...

Union Bank of Nigeria Shareholders Meet to Restructure Balance Sheet

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Shareholders of Union Bank of Nigeria Plc will meet next Tuesday to restructure the bank’s balance for optimum performance.

Specifically, the board of directors of the bank is asking the shareholders that subject to the confirmation of the Federal High Court, the company’ s issued share capital (including for this purpose its Share Premium Account) be reduced by the sum of N54.458 billion which has been lost or is otherwise unrepresented by available assets and that the credit arising from the reduction be used to eliminate the retained loss in the company’ s audited financial statements as at 31st December 2018.”

The directors are also asking that they be authorised to do all acts and things and to approve, sign and/or execute all documents which in their opinion may be necessary, expedient or appropriate confirmation from the Federal High Court.

In a notification to the Nigerian Stock Exchange (NSE) Thursday, Union Bank explained that a review of its financial position as at 31st December 2018 established a deficit of N54.458billion as accumulated permanent losses from legacy transactions, in addition to the N247.868 billion approved by shareholders, in 2017.

It said the balance sheet restructuring proposed will not affect the bank’s authorised or issued share capital or regulatory capital but should result in a reduction of the credit balance in the bank’s Share Premium Account, while leaving the aggregate shareholders’ funds unchanged.

“It would have no impact on the bank’s creditors but rather, pave the way for the bank’s investors to receive dividends out of the bank’s future profits,” it stressed.

Consequently, the board of directors is proposing a reduction of N54.458 billion from the Bank’s Share Premium Account of N187.091billion, pursuant to sections 106 and 107 of Companies and Allied Matters Act (CAMA).

“The reserve arising from the reduction of capital would be used to eliminate the negative retained earnings as at 2018 full year end,” Union Bank said.

Meanwhile, trading at the stock market remained bearish as the NSE All-Share Index declined 1.3 per cent to close at 30,527.07, while market capitalisation shed N179.1 billion to close at N13.4 trillion.

However, activity level was mixed as volume traded declined 11.7 per cent to 217.2 million units while value traded advanced 106.7 per cent to N5.8 billion. The top traded stocks by volume were Guaranty Trust Bank Plc (82.8 million units), Zenith Bank Plc (36.0 million units) and United Bank for Africa Plc (8.0 million units).

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