United Bank for Africa (UBA) Plc on Wednesday cancelled 2.08 billion ordinary shares valued at nearly N20 billion that belonged to the bank’s Staff Share Investment Trust Scheme (SSIT).
The share cancellation is part of the closure process for the bank’s SSIT, ending the practice of allocating shares to employees. Shareholders of the bank had at the annual general meeting in 2016 approved the cancellation of the shares under the SSIT in line with the board’s decision to close the SSIT.
The total outstanding ordinary shares of UBA which stood at 36.28 billion ordinary shares before the cancellation reduced to 34.199 billion ordinary shares after the cancellation.
Market analysts had earlier raised concerns that the bank has not fully disclosed details about the SSIT, alleging that the SSIT was used as a front to warehouse shares and illegally inflate subscription level during the heyday of the public offer in 2005 to 2008.
Analysts said the directors of the bank should disclose the whereabouts of the dividends paid over the years on the cancelled shares and the reason for the warehousing of the shares.
The management of the bank however stated that the cancellation would lead to 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,” the bank stated.
According to the bank, the cancellation of SSIT shares has no impact on its liquidity and capital adequacy ratios as it 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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