Five directors who have direct and indirect holdings in Unity Bank Plc are set to receive 67 percent of the proposed N37.14 billion payout to shareholders as the bank prepares to merge with Providus Bank Limited.

According to the register of members as at 31 December 2023 seen by BusinessDay, Asset Management Corporation of Nigeria (AMCON) has 4,000,130,848 units of shares, representing 34.22 percent stake in the bank.

Pan African Capital nominee has 1,480,614,483 units, representing 12.67 percent stake, while Lighthouse Capital Limited boasts of 1,053,199,290 units, indicating a 9.01 percent shares.

Similarly, Ibad Limited owns 717,722,190 units, representing 6.14 percent, while EL-Amin (Nigeria) Limited has 615,889,636 units, which is 5.27 percent stake. The five directors have 67.31 percent stake altogether, representing about N25 billion payout.

Individual stakes

Pan African Capital will receive N4.7 billion if the nominee opts for cash payment for shares in the bank ahead of the merger. Lighthouse Capital Limited will get N3.35billion, while Ibad Limited is set to receive N2.28billion. Also, EL-Amin (Nigeria) Limited will get N1.96 billion.

A look into the directors’ holdings shows that Yabawa Lawan Wabi – representing AMCON – indirectly holds 4,001,130,848 units, representing 34.22 percent of the issued shares of the bank. If he chooses cash payment as compensation for the merger between Unity Bank and ProvidusBank Limited, he will get N12.72 billion.

Also, Iyabo Obasanjo – representing Tempo Food & Packing Limited, Obasanjo Holdings, Alarab Properties Limited, Agro Mixed Nigeria Limited and Ibad Limited – indirectly holds 926,104,410 units of Unity Bank’s shares, representing 7.92 percent of the issued shares. If the parties represented by Obasanjo opt for cash payment, they will get about N2.95 billion as payout.

Hafiz Mohammed Bashir indirectly owns 648,472,967 units of Unity Bank’s shares, representing 5.54 percent. This implies that if Bashir opts for cash payment, he is expected to get about N2.06 billion as payout.

Halima Babangida, directly through El-Amin Nigeria Limited and B-Sha Limited, owns 38,191,947 shares in Unity Bank Plc, representing 0.33 percent of the issued shares. If they choose cash payment, they will receive N121.45 million.

Proposed resolutions

The sub-joined resolutions that will be proposed for shareholders’ approval at the court ordered meeting in Ogun State on September 26 will include, among others, that all shareholders of Unity Bank shall, after the scheme is sanctioned by the court, be paid N3.18 for every share held in the bank in accordance with the terms stipulated in it, or be allotted 18 ordinary shares in Providus Bank Limited (credited as fully paid) in exchange for every 17 ordinary shares of Unity Bank.

Unity Bank’s shareholders will either be receiving cash payments or allotted shares in Providus. Unity Bank has 11.689 billion outstanding shares outstanding, each last traded at N1.51. The proposed N3.18 cash payment is more than double the N1.51 which the bank’s stock last traded on the Nigerian Exchange Limited (NGX).

Unity Bank Plc’s 63,559 shareholders hold N11.689 billion issued shares, according to the bank’s directors’ report for the year ended December 31, 2023.

At inception, the public sector ownership within Unity Bank was more than the regulatory threshold of 10 percent. The bank had, between 2006 and 2010, reduced the public sector from 70 percent to 30.40 percent. Unity Bank, through the 2014 capital raising exercise (via rights issue and private placement), diluted the percentage of public sector shareholding in the bank from 30.40 percent as at September 3, 2014 to 8.91 percent as at December 31, 2014.

The public sector ownership currently stands at 8.27 percent as at December 31, 2023.

“We draw attention to Note 35 of the financial statements, which indicates that the bank incurred a net loss after tax of N62.6 billion during the year ended December, 31 2023 and, as of that date, the bank’s total liabilities exceeded its total assets by N326.9 billion and the capital adequacy stood at negative 76.14 percent (2022: Negative 89.69percent),” said KPMG Professional Services, Chartered Accountants in its December 19, 2024 note on Unity Bank’s 2023 audited financial statement.

“The bank therefore did not meet the minimum capital requirement of N25 billion for a national bank and the Capital Adequacy Ratio (CAR) as stipulated by the Central Bank of Nigeria (CBN) for a bank with a national banking license which is 10percent. As stated in Note 35, uncertainty exists that may cast significant doubt on the bank’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.”

The Central Bank of Nigeria (CBN) last year approved the proposal for the merger between Unity Bank Plc and Providus Bank Limited. The formal regulatory approval necessitated further actions towards a formal completion process of the merger.

A federal high court has directed that a meeting of the holders of the fully paid-up ordinary shares of Unity Bank Plc be convened and held for the purpose of considering and if thought fit, approving a Scheme of Merger between Unity Bank and ProvidusBank Limited. (BusinessDay)