United Bank for Africa (UBA) Plc, the Pan-African financial services group has secured the approval of the Securities and Exchange Commission (SEC) to operate as a commercial bank. Subsequently, a court ordered meeting has been scheduled to hold on December 13, 2012 to obtain the approval of shareholders for the restructuring.
Under the restructuring, all non-commercial banking businesses of the Group will be divested and held separately from UBA Plc by the Bank’s shareholders. 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. Besides UBA Plc, the restructuring will therefore result in the emergence of three separate standalone companies namely, UBA Capital Plc, African Prudential Registrars Plc and Afriland Properties Plc.
Specifically, the Board has proposed that the capital of the bank be reorganized 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, GMD/CEO, UBA Plc, Phillips Oduoza said the restructuring will 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 NSE; 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.