Shareholders of Abbey Mortgage Bank Plc have endorsed a reduction of the company’s share premium by N3.541 billion proposed by the board of directors.
Shareholders gave their approval at the company’s extraordinary general meeting held at the weekend in Lagos.
They considered and passed “the resolution which is subject to the confirmation of the court, the company’s issued share capital (including for this purpose its share premium account) be reduced by N3.541 billion, which has been lost or otherwise unrepresented by available assets and that the credit arising from the reduction be used to eliminate the retained loss in the company’s audited financial statements as at December 31, 2022.
The shareholders also authorised the directors of the company to do all such things and acts and to approve, sign and execute all documents which in their opinion may be necessary, expedient, or appropriate to effectuate, implement, and carry out the resolution including without limitation to seek confirmation from the Federal High Court.
The bank stated that, “over the past three years, it has undergone a remarkable transformation, consistently achieving increased profits year after year. This growth is a testament to the bank’s dedication to providing innovative financial solutions and maintaining quality banking services in the industry.
“The focus of the EGM was for the shareholders to pass a resolution approving the utilisation of a portion of the share premium account to offset historically accumulated losses, enabling the bank to complete its financial housekeeping and resume the payment of dividends. This significant decision bolsters its sustainable drive to create sustainable value for both shareholders and investors.”
Speaking to shareholders at the EGM, the chairman of the company, Mazi Emmanuel Kanu, noted that, a review of Abbey Mortgage Plc’s financial statement for the year ended December 2022 established a deficit of N3.541 billion as accumulated permanent losses from legacy transactions.
Kanu explained that 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.
He noted that the shareholder’s funds would remain unchanged, adding that it would not impact the company’s creditors but rather pave the way for shareholders to receive dividends out of the company’s future profits.
He noted that the company’s board of directors is proposing a reduction of N3.541 billion from the company’s share premium capital account of N5.117 billion, saying, the reserve arising from the reduction would be deployed to eliminate the negative retained earnings as of the 2022 financial year-end.
Also, the managing director, Mobolaji Adewumi, stated that, “we are immensely proud of the journey we have undertaken, and the support of our shareholders has been instrumental in our success. This momentous step is a testament to our resilience and sustainable growth focus.”
According to him, the bank is confident that this will strengthen its position in the industry and open up new avenues for growth and more success stories.