ABBEY MORTGAGE BANK : EXPLANATORY STATEMENT ON THE PROPOSED REDUCTION OF SHARE PREMIUM ACCOUNT
September 01, 2023 at 09:39 am EDT
Share
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
If you are in any doubt about the contents of this document or any action to be taken, you should consult your Stockbroker, Banker, Solicitor, Accountant or any other independent professional adviser duly registered under the Investment and Securities Act (No. 29 of 2007) immediately. If you have sold or otherwise transferred all your shares in Abbey Mortgage Bank Plc ('the Company'), please give this document and the accompanying proxy forms to the purchaser or transferee or to the Stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee. The receipt of this document or of any information contained in it or supplied with it or subsequently communicated to any person does not constitute investment advice to a shareholder from the Company or to any other person by the Company or its directors and the Company does not commit to providing shareholders with other information, updates or corrections to this document or the information contained herein.
EXPLANATORY STATEMENT ON THE PROPOSED REDUCTION OF SHARE PREMIUM ACCOUNT BY ABBEY MORTGAGE BANK PLC ("THE CAPITAL REDUCTION")
BACKGROUND
A review of Abbey Mortgage Bank Plc's (the Company) financial statements for the year ended 31st December 2022 established a deficit of N3,540,633,102 as accumulated permanent losses from legacy transactions.
RATIONALE
The balance sheet restructuring proposed will not affect the Company's Issued Share Capital or Regulatory Capital but would result in a reduction of the credit balance in the Company's Share Premium Account. The shareholders' funds would remain unchanged. It would not impact on the Company's creditors but rather pave the way for shareholders to receive dividends out of the Company's future profits.
MECHANICS
In terms of mechanics and structure, the Company's Board of Directors is proposing a reduction of N3,540,633,102 from the Company's Share Premium Account of N5,117,137,249.90 pursuant to the provisions of Sections 131 and 132 of the Companies and Allied Matters Act 2020. The reserve arising from the reduction would be deployed to eliminate the negative retained earnings as at 2022 Financial Year End (FYE).
4. EFFECT OF THE TRANSACTION
The effect of the proposed reorganization of the Company's capital is as follows:
EQUITY
N'm
FYE2022
Pre-Transaction
EFFECT
OF
FYE 2022
TRANSACTION
Post
Transaction
Share Capital
5,076
__
5,076
Share Premium
5,117
(3,540)
1,577
Retained Deficit
(3,540)
3,540
__
Statutory
298
__
298
Reserve
Regulatory
747
__
747
Reserve
7,698
7,698
PROCESS AND IMPLEMENTATION
At the Extraordinary General Meeting scheduled to hold on 29TH September, 2023, the shareholders of the Company will consider and, if thought fit, approve the Capital Reduction and Share Capital Reorganization.
Thereafter, an application will be made to the Federal High Court for an order sanctioning the Capital Reduction and Share Capital Reorganization. Upon the confirmation of the Court, the Court Order would be registered at the Corporate Affairs Commission ("CAC") to become effective.
CONTACT
Geoff O. Amaghereonu, Company Secretary/Legal Adviser.
Address: 23, Karimu Kotun Street, Victoria Island, Lagos.
Email:g.amaghereonu@abbeymortgagebank.com
Mazi Emmanuel Kanu Ivi
Chairman of the Board
Attachments
Original Link
Original Document
Permalink
Disclaimer
Abbey Mortgage Bank plc published this content on 31 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 September 2023 13:38:05 UTC.
Abbey Mortgage Bank Plc is a financial services group organized around three areas of activity:
- mortgage banking ;
- investment banking ;
- retail banking.
At the end of 2023, the group managed NGN 36.9 billion of current deposits and NGN 14.1 billion of current loans.
Products and services are marketed through a network of 8 branches located in Nigeria.