UBA’s Strategy to Raise ₦239.4bn Through Rights Issue – Elumelu

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Tony Elumelu, the Group Chairman of United Bank for Africa (UBA), has announced that the bank has launched a rights issue to raise ₦239.4 billion. This will involve issuing 6,839,884,274 ordinary shares of 50 kobo each at ₦35 per share to meet the Central Bank of Nigeria’s updated capitalisation requirements. Elumelu shared this development in a letter to shareholders.

The rights issue, which began on Friday, grants existing shareholders the opportunity to purchase one new ordinary share for every five shares they held as of November 5, 2024. The initiative follows a resolution passed during the bank’s Annual General Meeting in May 2024, which authorized the establishment of a ₦400 billion Equity Shelf Programme. UBA has identified the rights issue as the initial phase of its broader capital-raising strategy.

Elumelu explained the purpose of the exercise: “UBA’s Rights Issue aims to raise ₦239.4 billion through the issuance of new ordinary shares to our shareholders. The primary objective is to further strengthen our capacity to seize growth opportunities and maintain our leadership in the banking industry.”

This capital-raising effort comes in response to the Central Bank of Nigeria’s decision in March 2024 to increase capital requirements for Nigerian banks, aiming to bolster the banking sector and support the country’s goal of building a $1 trillion economy.