Bloomberg News

Union Bank Nigeria to Conclude Recapitalization in September

June 23, 2011

(Updates with CEO’s comment in third paragraph.)

June 23 (Bloomberg) -- Union Bank Nigeria Plc, a Nigerian lender, plans to conclude a recapitalization program in September after reaching an agreement with investors, Chief Executive Officer Funke Osibodu said.

A “transaction implementation agreement” will be signed “early in July” with African Capital Alliance, a private equity company, for the purpose of injecting new funds into the bank, she told reporters in Lagos today. Additional funding to meet capital requirements will come from the Asset Management Corp. of Nigeria and shareholders, she said, adding that about 290 billion naira ($1.85 billion) is needed to restore its capital adequacy position.

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, prompting the Central Bank of Nigeria to bail out eight lenders with 620 billion naira in 2009. The affected lenders have until Sept. 30 to re capitalize or face liquidation, according to the central bank.

Union Bank will have an implementation document ready for approval by regulators in August, said Osibodu.

--With assistance from Dulue Mbachu in Lagos. Editors: Antony Sguazzin, Emily Bowers

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

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net


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