The sale of Polaris Bank Limited was conducted in accordance with established regulations, according to the Central Bank of Nigeria (CBN).
Osita Nwanisobi, the director of corporate communications for the apex bank, said this Wednesday, adding that pertinent facts and the procedures leading to the bank’s eventual sale are in the public domain.
He said: “For the records, the public is referred to the statement dated October 20, 2022, by CBN and AMCON announcing the sale of 100 per cent equity in Polaris Bank to a new core investor, Strategic Capital Investment Limited (SCIL), wherein it provided copious details of the process by which the sale was conducted.
“Contrary to claims in the aforementioned online publication, the divestment from Polaris Bank was supervised by a Divestment Committee (Committee) comprising senior representatives of AMCON & CBN and supported by reputable legal and financial advisers. In addition, the divestment mode, process and decision received requisite board and regulatory approvals.”
He insisted that no other party had ever made a higher purchase offer, and that the company in question, Fairview Acquisition Partners, had expressed interest in buying two banks, including Polaris Bank, for a total of N1.2 trillion, an indicative offer that represented a material loss to the company because it significantly discounted the N1.305 trillion in existing debt that Polaris Bank owed to AMCON.
Nevertheless, he continued, Fairview Acquisition Partners was encouraged by the financial advisors to join in the selling process along with 24 other parties by signing a Non-Disclosure Agreement (NDA), the process’ initial step.
“The financial advisors informed the Committee that Fairview Acquisition Partners neither executed nor returned the NDA despite verbally confirming receipt of the agreement and after follow-up from the financial advisors. Therefore, Fairview Acquisition Partners did not take the opportunity to update their offer by participating in the divestment process and thus did not make a binding purchase offer for Polaris Bank.”
“The divestment was executed based on the relevant laws, global best practices for bank resolutions, and requisite regulatory approvals.”
“The Committee, along with its legal and financial advisers, conducted a rigorous technical and financial evaluation of the purchase proposals, assessing promoters’ fitness and propriety, offer price received vs. reserve price, funding structure and financial capacity, strategy and growth plans, amongst others.”
“Following evaluation, the promoters of the strategic purpose vehicle, SCIL, emerged as the preferred purchaser, having presented the most comprehensive technical/financial purchase proposal and the highest-rated growth plans for Polaris Bank. In addition to passing all fitness and propriety tests, the promoters also made the highest financial offer for the bank, which was significantly above its core valuation and reserve price,” he stated.
According to Nwanisobi, SCIL’s legally binding offer included an immediate upfront payment of N50 billion as well as complete responsibility for the N1.305 trillion AMCON debt, which amounted to a total purchase price of N1.355 trillion.
He added: “This offer was the most competitive and provided taxpayers and the Federal Government with more than full recovery of its intervention cost. By the sale, the CBN and Federal Government achieved a successful, value-driven resolution of a strategic financial institution.
“This curiously-timed online publication deliberately misrepresents the circumstances surrounding the sale of a strategic asset of the Federal Government. Its misleading statements are intended to undermine the credibility of the divestment process. It also portends negatively on the stability of Polaris Bank and risks derailing the progress made by the monetary authorities.”
The divestment from Polaris Bank, according to CBN, was an institutional choice overseen by a Committee made up of senior AMCON and CBN representatives, coordinated through recognized legal and financial consultants, and approved by the leadership and boards of the respective institutions.