BY PETER EGWUATU

Following the approvals received from shareholders, it appears that Union Bank Nigeria (UBN) Plc shares will be oversubscribed as they have generally expressed keen interest to pickup their rights.

Some shareholders groups and capital market operator at the weekend said they have seen enormous expressions of interests and fund deposits, aligning with initial book-building survey by investment advisers that showed that shareholders had placed funds on standby preparatory to the opening of the rights.

UBN is offering about 1.41 billion ordinary shares of 50 kobo each at N6.81 per share in the ratio of five new ordinary shares for every nine ordinary shares held as at the September 30, 2011. The application list for the rights issue opened on Wednesday December 14, 2011 and will remain open till January 20, 2012.

The opening of application list followed the final approval of the Securities and Exchange Commission (SEC). Shareholders had earlier at the extra-ordinary general meeting in September overwhelmingly approved the scheme of arrangement for the recapitalisation of the bank which included the rights issue and injection of new capital by new core investors.

President, Nigeria Shareholders Solidarity Association (NSSA), Chief Timothy Adesiyan said shareholders were expecting the rights issue and had prepared to pick their rights, noting that they voted for the scheme partly in consideration of the rights issue.

He said he and shareholders under the aegies of NSSA would pick their rights in furtherance of their commitments to see the re-emergence of a highly capitalised Union Bank.

According to him, “The rights are part of the conditions of the recapitalization. Shareholders have been in the know on the size, allotment and price of the issue even before they voted for the scheme of arrangement that included the rights issue.”

Adesiyan however, called on the Federal Government to reconsider the nationalisation of three previously quoted banks in the overall interests of minority shareholders and long-term development of the market.

President, United Shareholders’ Front, Mr. Gbenga Idowu, said he was determined to pick his rights irrespective of the downtrend in the secondary market.

According to him, shareholders recognise value offerings and would look beyond the immediate constraints. The capital market would gradually recover and shareholders who have locked in values during the downtrend would be in position to benefit from higher returns.

“I will pick my rights and advise others to pick theirs; the general feeling is that shareholders want to pick their rights. What’s happening in the banking recession is a passing phase, things will get better,” Idowu said.