Abbey Mortgage Bank Plc has notified the Nigerian Exchange and the investing public of the proposed reduction of share premium account of the Company.
In an explanatory statement available on the website of the NGX, the Company stated thus:
A review of Abbey Mortgage Bank Plc’s financial statements for the year ended 31st December 2022 established a deficit of N3.54 billion as accumulated permanent losses from legacy transactions.
As regards rationale for the proposed Share Capital Reorganization, the Company stated thus:
“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”.
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).
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.