UBA Shareholders Approve Bank’s Plans to Raise Capital

United Bank for Africa Plc (UBA) shareholders have approved the Nigerian lender’s plans to raise capital for business expansion, Chairman Israel Ogbue said.

“The bank will issue 12.7 billion ordinary shares by any of a special placing, a rights issue or a public offering at a price and on terms that will be determined by the directors,” he told reporters in Lagos, the commercial capital today.

“We still lack clarity on the price, structure and timing rationale,” for the capital raising, and “would expect the stock to continue to react to this uncertainty,” Mathew Pearson, the London-based head of African equity sales at Standard Bank Group, wrote in an e-mailed note to clients today. “We downgraded our recommendation to a Hold from a Buy given the uncertainty” of the transaction.

UBA shares declined 5 kobo, or 1.8 percent to 2.80 naira by the 2:30 p.m. close in Lagos. The stock has fallen 62 percent this year, compared with a 19 percent decline in the Nigerian Stock Exchange All-Share Index over the same period.

To contact the reporter on this story: Emele Onu in Johannesburg at eonu1@bloomberg.net

To contact the editor responsible for this story: Hilton Shone at hshone@bloomberg.net

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