Leadership (Abuja)
16 October 2008
Union Bank Nigeria Plc yesterday in Lagos announced the indefinite suspension of their N300.6 billion hybrid public offer and rights issue to the investing public.
The News Agency of Nigeria (NAN) quotes the Group Managing Director of Union Bank, Mr Barth Ebong, as saying that the suspension was due to the prevailing price losses and the low perception of investors on the market.
Union Bank had prior to the equity price losses scheduled to float 1.117 billion shares at N35 per share through rights issue and another 7.3 billion shares at N36 per share to the investing public.
The bank had planned to channel the funds into information technology, branch expansion, infrastructure financing and private public partnership schemes.
Fielding questions from newsmen, Ebong said that the board and management of the bank were currently re-strategising to meet the bank's financial needs, which necessitated the suspension of the offer.
Ebong, who did not give details of the strategies, however, said: "the most critical issue now remains creating value for their investors and the protection of the bank."
"The public offer suspension is not only necessary, but prudent, to enable us assess the current capital market depression and strategies on the best way to raise funds within and outside the Nigerian Stock Exchange.
"Wisdom demands that we sit down and analyse how the current national and global capital market affect and will affect us," he added.
On the health of the bank's subsidiaries, he said that Union Bank UK and South Africa were only indirectly affected by the global financial industry depression.
"We are not affected by any loss of funds, but by the unhealthy financial environment of the home countries in which we operate.
"Sincerely, we are not part of the sublime financial industry issues in the U.S. or other jurisdictions because of our conservative approach to banking," Ebong said.
According to him, the nation's banking industry as part of the global players, is beginning to see some of the impacts of credit squeeze, depending on the individual bank's exposure to the U.S. and European banks.
"Most individuals or corporate concerns, who depend so much on foreign loans are not likely to have them now because of cost implications and their concentration on internal financial problems," he said.
Ebong assured that Union Bank was far from any financial crisis and that the bank would focus on mobilising the large untapped informal sector funds to mitigate any shortfall in the global arena. ( NAN )
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