Court okays Union Bank recapitalisation plan

A Federal High Courtsittingat Lagos, last week, directed that a meeting of shareholders of Union Bank of Nigeria Plc be held in Abuja on September 30 to approve the Scheme of Arrangement between the banker and its potential core-investor: the African Capital Alliance Consortium (ACA Consortium).This will automatically pave way for Union Bank, which is the only stand alone bank out of the eight rescued banks, to be recapitalised in line with Central Bank of Nigeria's (CBN) deadline.At the meeting, apart from the shareholders approving the new paid up share capital, as well as the ratio of ordinary shares to be held by existing shareholders in the new dispensation, they will also approve the allocation of shares to the Asset Management Corporation of Nigeria (AMCON), which is expected to move the bank from negative to zero capital.Also for approval are the 1,407,291,667 ordinary shares of 50 kobo each to be offered to existing shareholders by way of a rights issue.Union Bank was one of nine banks (Wema Bank, Afribank, Spring Bank, BankPHB, Intercontinental Bank, Oceanic Bank, Finbank, and Equatorial Trust Bank) rescued in a N620 billion bailout by the CBN in 2009.Already, Wema Bank and Unity Bank have been recapitalised, while Afribank, Spring Bank, BankPHB have been nationalised and their assets transferred to the three newly formed banks ' Mainstream, Enterprise and Keystone.This followed the defunct banks' inability to show that they would be recapitalised before the September 30 deadline.
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