UBA scraps share sale
The United Bank for Africa (UBA) has suspended plans to sell shares to raise additional capital due to weak local market conditions, chief executive Phillips Oduoza said on Thursday.
“The Board and management have suspended our equity capital raising at this point in time pending when capital markets improve,” he told a conference call of investors, a day after the bank issued a profit warning on its 2011 results.
Shares of UBA fell almost 5 percent for a second straight day as investors dumped the stock following the profit warning. UBA, one of Nigeria’s top lenders, said on Wednesday it expected to announce a loss for 2011, driven by one-off write-downs against earnings, including loans sold to a state-owned “bad bank” AMCON. It forecasted a quick recovery in the first quarter of this year.
It sold close to N100 billion in bad loans to AMCON, Mr Oduoza told the call.
In October, UBA said it planned to raise capital through a private placement and a rights issue to help support large-ticket lending in infrastructure and agriculture sectors.
UBA’s chief executive said the bank’s board had earlier approved a 500 billion naira debt and equity capital raising program to shore up its balance sheet and strengthen its African subsidiaries but that the bank was suspending its share sale.
He said the bank had raised N55 billion debts so far from the total
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