(Updates with rights prospectus)
By Chijioke Ohuocha
LAGOS, Sept 20 (Reuters) - Nigeria’s Union Bank has begun a share sale to existing shareholders to raise 50 billion naira ($159 mln) after regulatory approval, the bank said on Wednesday.
The mid-tier bank said the rights issue opens for subscription on Sept. 20 and closes on Oct. 30. It plans to offer 12.1 billion shares at 4.10 naira each, issuing five new shares to investors for every seven already held.
Union Bank, set up 100-years ago, said it planned to spend 80 percent of the funds to enhance its regulatory capital and boost working capital.
The lender, in which Atlas Mara Ltd, the African investment vehicle of former Barclays boss Bob Diamond, owns a 22.1 percent stake, has said it planned to raise funds also to tap opportunities to lend to agribusinesses.
At last Mara in June said it was raising $200 million to increase its stake in Union Bank and other businesses. It said at the time it was buying a 13.4 percent stake in the Union Bank from Clermont Group, taking its total holding to 44.5 percent.
Clermont International is among a consortium of local and foreign investors that own 65 percent, Union Bank said in its rights circular, adding that it was not aware of any investor trying to acquire a majority stake.
Union Bank was a former unit of Barclays Bank.
Shares in Union Bank, which have gained 9.1 percent so far this year, fell 4.67 percent on Wednesday to 5.70 naira on the Lagos bourse, a 28 percent premium to the rights price.
The stock fell 20.3 percent last year.
$1 = 314.00 naira Editing by Jane Merriman and Elaine Hardcastle