Unity Bank in April 2015 commenced its share reconstruction scheme that saw its outstanding shares reduce from 116,893,379,420 to 11,689,337.942. The company’s share price by fiat rise from 50kobo per share to N5 per share even though market capitalisation stayed the same. Nairametrics had in May reported that the company’s share price had halved by about 50% just one month after the share reconstruction. We opined that if the share reconstruction move back fires, shareholders will be in the hook to lose billions of naira in market value.
Things have however gone from bad to worse as Unity Bank’s share price is now N1.26 kobo and has lost about 75% of its value since it embarked on the share reconstruction scheme. From a market value of N58.4 billion when it had 116.8 million outstanding shares, its value is now just N14.7 billion. The amount is the smallest of the commercial banks and is now 64% less than Wema Bank. In fact, Wema Bank had a marked value of about N40.2 billion back in October 2014 when Unity bank was still valued at N58.4 billion.
AMCON in Unity Bank’s 2014 annual report owns about 34.4% of Unity Bank and would have seen its share value in the company impair by a further 75% or N15 billion. AMCOn in its 2014 annual report reported a loss after tax of N275 billion which could be much more going by the spate of loss in value recorded in the NSE.
