Wema to hold EGM on share capital restructuring

The board of Wema Bank Plc on Friday informed investors of plans to hold an Extra Ordinary General Meeting slated for October 20, 2017 to seek shareholders’ approval for a comprehensive scheme of share capital restructuring in a bid to ensure improve efficiency of its balance sheet.

Specifically, the bank in a notice to the Nigerian Stock Exchange (NSE) signed by Oluwole Ajimisinmi, the company secretary and legal adviser, said the reduction in share capital follows the desire of the board to reward its loyal shareholders who have not received any dividend for several years. This, it said, was despite the bank’s return to profit four years ago owing to the backlog of negative retained earnings balance arising from losses and other impaired assets.

Despite the return to profit, it said the bank was precluded from offering dividend to shareholders, just as it restricts the ability and increases the cost of raising new capital.

The holistic capital reduction scheme, the statement assured, “would have no impact on the current holdings of shareholders, though the bank will be creating a capital reduction account to charge off the impaired assets while an equivalent amount will be moved from its share premium account to effectively close the entries.”

Should the shareholders approve the proposal, the bank will apply to the Federal High Court for approval of the scheme.