Union Bank Moves To Recapitalise Seeks N290bn


Plans are in the pipeline for the Union  Bank of Nigeria (UBN) to expand its capital base.

The bank has agreed with its investors to recapitalise to save the bank from the recent threat of liquidation arising from a debt crisis.

A debt crisis arising from loans to speculators on the Nigerian stock market and companies in the crude oil and natural gas industry threatened the banking industry with collapse.

This issue prompted the Central Bank of Nigeria (CBN) to bail out eight lenders with N620 billion in 2009, giving the affected banks up to September 30, 2011 to recapitalise or face liquidation.

To this effect, the Chief Executive Officer of UBN, Mrs Funke Osibodu, told newsmen that UBN plans to conclude a recapitalisation programme in September.

Osibodu said that a “transaction implementation agreement” will be signed early in July with African Capital Alliance, a private equity company, for the purpose of injecting new fund into the bank.

According to the bank chief, additional funding to meet the capital requirement will come from the Asset Management Corporation of Nigerian (AMCON) and shareholders, adding that about N290 billion ($1.85billion) is needed to restore the bank’s capital adequacy position.

She noted that Union Bank will have an implementation document ready for approval by the regulators in August, 2011.