United Bank for Africa (UBA) has cancelled the 2,080,104,955 units of ordinary shares held by its staff.
The cancellation, according to the bank will complete all relevant processes to effect the cancellation of 2,080,104,955 units of ordinary shares being kept as Staff Investment Trust Scheme (SSIT).
The Bank, in a statement on the floor of the Nigerian Stock Exchange (NSE), explained that the transfer of shares from the trust scheme is part of the process of executing the special resolution of the shareholders at the annual general meeting held in April, 2016, cancelling the shares held under the scheme.
According to the Bank, upon cancellation of the SSIT the outstanding shares of UBA will be reduced from 36,279,526,321 units to 34,199,421,366 units.
UBA explained that implementation will increase the annualised 2017 first quarter earnings per share (EPS) of the Group by 6.1 per cent, from N2.46 to N2.61, translating to a Price to Earnings Ratio of 3.4x.
“This process is value accretive 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.
“For example, shareholder who owns 362.8 million units, which translates to one per cent of the Bank’s equity before the cancellation of SSIT, will still own same number of units after the cancellation of SSIT, but the implied percentage holding will increase to 1.06 per cent of the bank’s equity, as the cancellation of SSIT shares reduces the outstanding shares and increases the percentage holding of all other shareholders on a pro rata basis,” the Bank said.
The Bank added that the cancellation of SSIT shares has no impact on its liquidity and capital adequacy ratio, noting that 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.