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The divestment is in compliance with the Central Bank of Nigeria (CBN) regulation for all banks to divest from their non-banking subsidiaries and focus on their core areas of expertise.
The bank notified the Nigerian Stock Exchange (NSE) yesterday that it had appointed financial advisers for the purpose of the divestment. However, Union Bank did not mention the names of the advisers.
According to the bank, it had resolved that shares in its subsidiaries, with the exception of Union Pension Custodian Limited, which the Board resolved should be wound up, would be divested. On the other hand, Union Bank UK Plc, which will be retained as the only subsidiary of the bank.
Union Bank disclosed that it had already held discussions with the CBN and interested investors had carried out in-depth due diligence exercises while rigorous bidding processes had been conducted with a view to selecting the preferred investor for each subsidiary.
“Preliminary steps are being taken to wound up Union Pension Custodian Limited while preferred bidders have been selected for Union Homes Savings and Loans Plc, Union Assurance Company Limited and Union Capital Markets Limited and share purchase agreements have been executed with a view to making formal applications in respect of the transactions to all regulatory bodies,” the NSE quoted the bank as saying.
It was gathered that Union Bank will undertake the same processes for divestment from Union Registrars Limited, UBN Property Limited and the rest of the subsidiaries in due course.
Meanwhile, trading at the stock market remained positive for the second day with the NSE All-Share Index (ASI) appreciating by 0. 28 per cent to close at 38,579.39. Similarly market capitalisation added N35 billion too close N12.7 trillion.
The market recorded 25 gainers against 21 losers. Top gainers included: Mobil Oil Nigeria Plc (7.4 per cent), Seplat Petroleum Development Company Plc (5.0 per cent).