UBA to raise N239.4b through rights issue

• Shareholders to receive one new share for five existing shares

The United Bank for Africa (UBA) Plc has announced it will raise N239.4 billion through a Rights Issue of 6,839,884,274 ordinary shares of 50 kobo each at N35.00 per share.
   
The Rights Issue, which opens today, November 15, allows existing shareholders to purchase additional shares in proportion to their current holdings and is being offered based on one new ordinary share for every five existing ordinary shares held by shareholders, as of November 5, 2024.
   
In his letter to shareholders, the Group Chairman of UBA, Tony Elumelu, noted that following the resolution of the Group’s shareholders at the Annual General Meeting held in May 2024, authorising the establishment of the N400 billion Equity Shelf Programme, UBA will embark on a Rights Issue, as the first step in its broader capital raising programme.
   
“UBA’s Rights Issue aims to raise N239.4 billion, through the issuance of new Ordinary Shares to our shareholders. The primary objective of this Rights Issue is to further strengthen our capacity to take advantage of growth opportunities and sustain our leadership in the banking industry,” Elumelu said.
   
Explaining the use of proceeds, the Group Chairman noted that beyond regulatory compliance, the funds will expand the Group’s lending capacity, and investment in digital infrastructure, support sustainable business practices and expand the Group’s African operations.

Elumelu also highlighted how UBA is driving economic growth across Africa. “Our historic partnership with the Africa Continental Free Trade Area (AfCFTA) Secretariat, where UBA pledged up to US$6 billion in financing over the next three years to support eligible SMEs across Africa underscores our commitment to fostering economic development.”
   
The issuance follows the revised minimum capital requirements for Nigerian commercial banks announced by the apex banking regulator in Nigeria – the Central Bank of Nigeria (CBN) earlier this year.
   
The bank noted that it had consistently demonstrated growth and resilience, evidenced by the Group’s strong financial performance and recent recognition within the industry. UBA’s progressive dividend policy, which has seen an increase of 14.8% in annualised dividend yield has demonstrated the Group’s ability to reward shareholders consistently.