…AMCON, Iyabo Obasanjo, Bashir, Babangida, others
Three directors who have direct and indirect holdings in Unity Bank Plc will get large chunk of the proposed N37.14billion cash payment for shareholders ahead of a merger with ProvidusBank Limited.
The sub-joined resolutions that will be proposed for shareholders approval at the court ordered meeting in Ogun State on September 26 will include among others that all shareholders of Unity Bank shall, after the Scheme is sanctioned by the Court, be paid N3.18 for every share held in the bank in accordance with the terms stipulated in the Scheme, or be allotted 18 ordinary shares in Providus Bank Limited (credited as fully paid) in exchange for every 17 ordinary shares of Unity Bank.
Unity Bank’s shareholders will either be receiving cash payments or allotted shares in Providus. Unity Bank has 11.689 billion shares outstanding, each last traded at N1.51. The proposed N3.18 cash payment is more than double the N1.51 which the bank’s stock last traded on the Nigerian Exchange Limited (NGX).
Unity Bank Plc’s 63,559 shareholders hold its N11.689billion issued shares, according to the bank’s director’s report for the year ended December 31, 2023.
At inception, the public sector ownership within Unity Bank was more than the regulatory threshold of 10percent, the bank had between 2006 to 2010 reduced the public sector from 70 percent to 30.40 percent. Unity Bank through the 2014 Capital Raising exercise (via Rights Issue and Private Placement) diluted the percentage of public sector shareholding in the bank from 30.40 percent as at September 3, 2014 to 8.91 percent as at December 31, 2014. The public sector ownership currently stands at 8.27 percent as at December 31, 2023.
According to the register of members as at 31 December 2023, no shareholder held more than 5percent of the issued share capital of the bank except the following: Asset Management Corporation of Nigeria (AMCON) (34.22 percent or 4,000,130,848 units), Pan African Capital Nominee (1,480,614,483 units or 12.67 percent), Lighthouse Capital Limited (1,053,199,290 units or 9.01 percent), Ibad Limited (717,722,190 units or 6.14 percent), and EL-Amin (Nigeria) Limited (615,889,636 units or 5.27 percent).
Pan African Capital Nominee will receive N4.7billion if they opt for cash payment for their shares in the bank ahead of merger, Lighthouse Capital Limited (N3.35billion), Ibad Limited (N2.28billion), and EL-Amin (Nigeria) Limited (N1.96billion).
Looking at the directors’ holdings shows that Yabawa Lawan Wabi – representing Asset Management Corporation of Nigeria (AMCON) – indirectly holds 4,001,130,848 units, representing 34.22 percent of the issued shares of the bank. If they choose cash payment as compensation for the merger between Unity Bank and ProvidusBank Limited, it amounts to N12.72 billion.
Also, Iyabo Obasanjo – representing Tempo Food & Packing Limited, Obasanjo Holdings, Alarab Properties Limited, Agro Mixed Nigeria Limited and Ibad Limited – indirectly holds 926,104,410 units of Unity Bank’s shares, representing 7.92 percent of the issued shares. If the parties Obasanjo represents opt for cash payment, they will get about N2.95billion for the merger between Unity Bank and ProvidusBank Limited.
Hafiz Mohammed Bashir indirectly owns 648,472,967 units of Unity Bank’s shares representing 5.54 percent. This implies that if Bashir opts for cash payment, he is expected to get about N2.06billion for the merger.
Halima Babangida directly through El-Amin Nigeria Limited and B-Sha Limited owns 38,191,947 shares in Unity Bank Plc, representing 0.33 percent of the issued shares. If they choose cash payment, it will amount to N121.45million.
“We draw attention to Note 35 of the financial statements, which indicates that the bank incurred a net loss after tax of N62.6 billion during the year ended December, 31 2023 and, as of that date, the bank’s total liabilities exceeded its total assets by N326.9 billion and the capital adequacy stood at negative 76.14 percent (2022: Negative 89.69percent).
“The bank therefore did not meet the minimum capital requirement of N25 billion for a national bank and the Capital Adequacy Ratio (CAR) as stipulated by the Central Bank of Nigeria (CBN) for a bank with a national banking license which is 10percent. As stated in Note 35, uncertainty exists that may cast significant doubt on the bank’s ability to continue as a going concern. Our opinion is not modified in respect of this matter,” said KPMG Professional Services, Chartered Accountants in their December 19, 2024 note on Unity Bank’s 2023 audited financial statement.
The Central Bank of Nigeria (CBN) last year approved the proposal for the merger between Unity Bank Plc and Providus Bank Limited. The formal regulatory approval necessitated further actions towards a formal completion process of the merger.
The Federal High Court has directed that a meeting of the holders of the fully paid-up ordinary shares of Unity Bank Plc be convened and held for the purpose of considering and if thought fit, approving a Scheme of Merger between Unity Bank and ProvidusBank Limited.
Also, among others, the shareholders at the meeting will be expected to approved for the entire share capital of Unity Bank to be cancelled and the bank be dissolved without winding up. The shareholders will also be expected to ratify that the certificate of incorporation of Providus Bank Limited be the certificate of incorporation of the Enlarged Bank.
“That the Solicitors of the bank be and are hereby directed to seek orders of the Court sanctioning the Scheme and the foregoing resolutions, as well as such other incidental, consequential or supplemental orders as are necessary or required to give full effect to the Scheme.
As directed by the Court, the shareholders of Unity Bank will also be required to rectify, that the merger of all the assets, liabilities and undertakings, including real properties, and intellectual property rights of the bank with that of ProvidusBank Limited, upon the terms and subject to the conditions set out in the Scheme Document, be approved without any further act or deed.
“That the directors of the bank be and are hereby authorised to take such other actions and steps as may be necessary or required to give full effect to the Scheme,” according to a notice of court-ordered meeting of Unity Bank Plc signed by Adepetun Caxton-Martins-Agbor & Segun.
