UBA MD, Mr. Phillips Oduoza
By Obinna Chima
United Bank for Africa (UBA) Plc has said it secured the approval of the Securities and Exchange Commission (SEC) to operate as a standalone commercial bank.
Beside UBA Plc, the exercise would also result in the emergence of three separate standalone companies namely- UBA Capital Plc, African Prudential Registrars Plc and Afriland Properties Plc.
To this end, the bank in a statement at the weekend announced that a Court-ordered Extra-Ordinary General Meeting (EGM) has been scheduled to hold on December 13, 2012, to obtain the approval of shareholders for the restructuring.
The move is in line with the Central Bank of Nigeria’s (CBN’s) banking model, which stipulates that commercial banks must divest from their non-banking business or create a Holding Company (HoldCo).
Under the new restructure, all non-commercial banking businesses of the UBA Group would be divested and held separately from UBA Plc by the bank’s shareholders, the statement explained.
It added: “The divested non-commercial banking businesses (except Africa Prudential Registrars and Afriland Properties that will be held directly by shareholders) will be consolidated within UBA Capital Plc, which today is one of the Bank’s subsidiaries.
“Specifically, the Board has proposed that the capital of the bank be reorganised by the reduction of the bank’s Accumulated Reserves by an amount equal to the aggregate value of the bank’s investment in the non-commercial banking subsidiaries and the excess realty to be transferred to Afriland Properties Plc.”
Explaining the rationale behind the restructuring, Group Managing Director/Chief Executive Officer, UBA Plc, Mr. Phillips Oduoza, said the exercise would result in greater value and provide each entity with easier access to long term capital to finance growth thus protecting shareholders' value.
“Both UBA Capital Plc and Africa Prudential Registrars Plc will eventually become listed companies on the Nigerian Stock Exchange; hence, eligible shareholders will have the benefit of owning liquid stocks in these entities while Afriland Properties will be listed at a much future date,” he added.
According to him, Africa Prudential Registrars Plc and Afriland Properties will be spun-off to the eligible shareholders in line with the CBN’s directive to banks to divest from such businesses.