A Federal High Court has ordered that a meeting between UAC of Nigeria Plc (UACN Plc) and its shareholders be convened for the purpose of considering, and if thought fit, approving a Scheme of Arrangement that will see the company transfer its entire units in UPDC Real Estate Investment Trust (UPDC REIT) to its eligible shareholders on a pro-rata basis.
According to a notice filed with the Nigerian Exchange Limited (NGX), the Court-Ordered Meeting will be held virtually, on the 20th of September at 10:00 am prompt.
It is pertinent to note that the transfer of the units held by the company in UPDC REIT to its eligible shareholders will be implemented through a scheme of arrangement under Section 715 of the Companies and Allied Matters Act (CAMA), 2020 as amended, incorporating a reduction in share capital under Section 131 of CAMA (the Scheme). By implication, these units will be transferred to shareholders, pro-rata to their shareholding in UAC.
What this means.
If the scheme is approved and implemented, this implies that UAC of Nigeria Plc will cease to be a unit holder in UPDC REIT. Consequently, UAC shareholders will hold UPDC REIT units in addition to their existing shares in the company.
Sequel to this, the company’s share capital account will be reduced by the sum of N3, 896,355,966, being the monetary value of the transferred units through the reduction of its share premium account. This amount will be transferred into the UPDC REIT Unbundling Liability Account.
Back story: Recall that UACN Plc had earlier announced its intent to divest from UPDC, after it sold a 51% stake to Custodian Investment Plc. The firm announced the mandatory takeover of UPDC by Custodian Investment, after the successful sale of 34,415,332 units of ordinary shares of 50 kobo each, at a price of 90 kobo per share to the latter. This move diluted UACN Plc stake in UPDC REIT from 93.86% to 42.85%.