By Nkiruka Nnorom

United Bank for Africa, UBA Plc, has said that it has secured approval from the Securities and Exchange Commission, SEC, to commence its rights issue.

Application for the rights issue, which is being made to the existing shareholders, according to a statement from the bank opened on Monday, December 29, 2014 and will close on Thursday, February 5, 2015. The bank is offering the rights the ratio of one new ordinary share for every 10 previously held by the shareholders as Wednesday, October 15, 2014 at N4.00 per share.

The bank had last year said that the undisclosed sum about to be raised would be directed towards shoring up its Tier 1 Capital. This approval by the SEC was further to the shareholders and Board resolutions authorising the bank to raise additional capital by various means, including a Rights Issue.

It would be recalled that analysts at Financial Times had projected N11.81k 12 month price targets on the shares of UBA in 2014.

According to Financial Times, the 14 analysts offering 12 month price targets for  UBA have a median price target of N9.53, with a high estimate of N11.81 and a low estimate of N7.50.

It stated that the median estimate represents a 36.93 per cent increase from the last price of N6.96 as at close of business on September 23, 2014, adding that as at September 12, 2014, the consensus forecast amongst 24 polled investment analysts covering United Bank for Africa noted that the company will outperform the market.

“This has been the consensus forecast since the sentiment of investment analysts deteriorated on Mar 04, 2013. The previous consensus forecast advised investors to purchase equity in United Bank for Africa,” Financial Times said in the report.

The bank had in the first quarter ended March 31, 2014 exceeded analysts’ expectation.