Unity Bank Plc on Monday concluded plans to raise N39.224bn via rights issue and private placement in a bid to revamp its operations.
The bank intends to raise about N19.224bn by offering, by way of rights to existing shareholders, 38.447 billion ordinary shares of 50 kobo each and 50 kobo per share on the basis of one ordinary share for every one ordinary share held at December 16, 2013.
It plans to raise the rest, N20bn, by offering through private placement 40 billion ordinary shares of 50 kobo each at 50 kobo per share.
While the rights issue opens on May 12 and closes on June 18, 2013, the private placement opens on June 20 and closes on June 23.
At the completion of a board meeting, which was held in Lagos on Monday, the Chairman, Unity Bank, Alhaji Lamis Dikko, said the bank planned to use the funds to expand and strengthen the bank’s operations for sustained growth and profitability.
Dikko added that the 40 billion shares being offered through private placement is for the Asset Management Corporation of Nigeria, stressing that AMCON’s mandate went beyond the purchase of bad loans from banks; it also had a mandate to invest.
The Managing Director and Chief Executive Officer of the bank, Mr. Henry Semenitari, assured the shareholders of the bank that the funds would be judiciously used to achieve set goals, stressing that the exercise would help revamp the bank.
He said, “The funds to be raised will be judiciously utilised to improve our processes, procedure and people. The bank’s Q1 report is already indicative of the improvements and is just an indication of the positive turn of results.”
The bank had recently declared a 26 per cent rise in profit before tax in the first quarter of 2014. It also recorded a reduction in total operating expenses by 8.5 per cent due to what it said was better cost management.
According to the bank, the offer proceeds will be used for branch development, information technology upgrade, products and channel upgrade, human resource development, corporate communications and enhancement of its working capital.
It said 15 per cent or N2.927bn of the proceeds of the private placement would be used for branch development and renovation, which would span 48 months. Another 15 per cent would be used for information technology upgrade, while 10 per cent would go to products and channel upgrade.
Human resource development will take 15 per cent or N2.927bn with corporate communication using up five per cent of the proceeds, while 40 per cent, N19.513bn will serve as working capital.
The proceeds of the private placement will also be allocated for the same purposes as that of the rights issue with each project getting the same percentage of the private placement funds as it got from the rights issue.
The bank had commenced the capital raising process following the approval given to the management by its shareholders at an Extra-Ordinary General Meeting held on December 23, 2013.
