ON Thursday, July 20, 2017, Vanguard published a story titled: “African Prudential Registrars Acquires 6% of UBA Shares” Vanguard Newspapers has since realised that the reported ‘acquisition of 6 percent of UBA Shares by Africa Prudential Registrars Plc’ is wrong. For clarity, United Bank for Africa Plc crossed 2,080,104,955 units of its ordinary shares from the Staff Share Investment Trust Scheme (SSIT) to the Group, at a price of N9.47 per share, through a non-cash transaction executed transparently on the floor of the Nigerian Stock Exchange.
This non-cash transaction, which enables UBA to repossess the shares at no cost to the bank, is part of the process for implementing the Special Resolution of UBA’s shareholders, passed at the Annual General Meeting held on Friday, April 8, 2016, to cancel shares held under the SSIT. These shares which are now treasury shares in the bank will be subsequently cancelled from the shares outstanding of the bank to complete the implementation of the shareholders’ resolution. Upon cancellation of the 2,080,104,955 units of ordinary shares, the outstanding shares of UBA will be reduced from 36,279,526,321 units to 34,199,421,366 units. Implementation will increase the annualized 2017 First Quarter Earnings Per Share (EPS) of the Group by 6.1 per cent, from N2.46 to N2.61, translating to a Price to Earnings Ratio of 3.4x.
The process is value accretive to shareholders as it uniformly unlocks value for every shareholder of UBA, given that the enterprise value of UBA Plc remains unchanged. The unit holding of all shareholders remains the same, whilst their respective percentage holding in UBA Plc will increase. For example, a shareholder who owns 362.8 million units, which translates to one per cent of the bank’s equity before the cancellation of SSIT, will still own same number of units after the cancellation of SSIT, but the implied percentage holding will increase to 1.06 per cent of the bank’s equity, as the cancellation of SSIT shares reduces the outstanding shares and increases the percentage holding of all other shareholders on a pro rata basis. The cancellation of SSIT shares has no impact on the liquidity and capital adequacy ratio of the bank. UBA Plc continues to maintain strong liquidity and capital adequacy ratios, which stood at 41 per cent and 19.4 per cent respectively, as at March 31, 2017. We regret the inconveniences the report might have caused the bank, Africa Prudential Plc and their principal stakeholders.
Source:© Copyright Vanguard Online