Shareholders of Abbey Mortgage Bank Plc on Friday in Lagos rose from an extraordinary general meeting where they approved a reduction in issued share capital by N3,540,633,102, or 69.19%, as part of its effort to create sustainable value for both shareholders and investors.
They also gave their blessing for the utilization of a portion of the share premium account to offset the company’s historically accumulated losses, thereby enabling the bank to complete its financial housekeeping and resume the payment of dividends.
Specifically, the meeting considered and passed a resolution by the board, subject to the confirmation of the court, that the company’s N5,117,137, 249.90 issued share capital “(including for this purpose its share premium account) be reduced by N3.540,633,102 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 directors were also authorized to do everything “to approve, sign 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.”
Chairman of the company Mazi Emmanuel Kanu Ivi, who addressed the meeting, explained that a review of the company’s financial statement for the year ended December 31, 2022 established a deficit of N3.541bn as accumulated permanent losses from legacy transactions.
He assured that the balance sheet restructuring proposed would not affect the company’s issued share capital or regulatory capital, but result in a reduction of the credit balance in the company’s share premium account.
The shareholder’s funds, he said, would remain unchanged in the process, and would not impact the company’s creditors, but instead pave way for shareholders to receive dividends from future profits.
Kanu added that in terms of mechanics and structure, Abbey’s board is proposing a reduction under the provisions of sections 131and 132 of the Companies and Allied Matters Act 2020.
Also addressing the shareholders, the Managing Director, Mobolaji Adewumi said, “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.
“As we look forward to a brighter future, Abbey Mortgage Bank Plc plans on the continuous delivery of exceptional financial services and creating value for our shareholders.
“The bank is confident that this will strengthen its position in the industry and open up new avenues for growth and more success stories.”