UBA cancels workers share investment scheme
United Bank for Africa Plc (UBA), has announced the crossing of 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.
This transaction implements the Special Resolution of UBA’s shareholders, passed at the Annual General Meeting held on Friday, April 08, 2016, to cancel shares held under the SSIT.
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 annualised 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.
This process is value accretion to shareholders, as the enterprise value of the Group 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 the same number of units after the cancellation of SSIT. However, 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.
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