With an initial payment of N50 billion to purchase 100% of Polaris Bank Limited’s stock, Strategic Capital Investment Limited (SCIL) has successfully acquired Polaris Bank Limited. The bank also committed to refund the N1.305 trillion that the Asset Management Company of Nigeria (AMC) and the Central Bank of Nigeria (CBN) invested in it (AMCON).
Following weeks of rumors, AMCON and CBN yesterday officially declared the conclusion of a share purchase agreement (SPA).
The declaration was made when the House of Representatives approved the sale of the acquired bank on Wednesday, noting that the acquisition had been done in accordance with established protocol and had the necessary presidential approval.
In a statement released on behalf of the Central Bank of Nigeria (CBN) and AMCON, Osita Nwanisobi, Director of the Corporate Communications Department, revealed that SCIL had paid an upfront consideration of N50 billion to acquire 100% of the bank’s equity and had also accepted the terms of the agreements, which include the full repayment of the amount of N1.305 trillion, which was the consideration bonds injected.
The statement read: “The CBN thus received an immediate return for the value it has created in Polaris Bank during the stabilisation period, as well as ensuring that all funds originally provided to support the intervention are recovered.
“The sale was coordinated by a Divestment Committee comprising representatives of the CBN and AMCON and advised by legal and financial consultants. The Committee conducted a sale process by ‘private treaty, as provided in Section 34(5) of the AMCON Act to avoid negative speculations, retain value and preserve financial system stability.
“In the process, parties who had formally expressed an interest in acquiring Polaris Bank, subsequent to the CBN intervention in 2018, were invited to submit financial and technical proposals. Invitations to submit proposals were sent to 25 pre-qualified interested parties, out of which three parties eventually submitted final purchase proposals following technical evaluation.
“All submissions were subject to a rigorous transaction process from which SCIL emerged as the preferred bidder having presented the most comprehensive technical/financial purchase proposal as well as the highest rated growth plans for Polaris Bank.”
The sale of the bank “marks the completion of a major intervention in a significant institution in the Nigerian banking system by the CBN and AMCON,” CBN Governor Godwin Emefiele was reported as saying.
Remember that since the apex bank terminated the license of the defunct Skye Bank Plc in 2018 and established Polaris to assume its assets and liabilities, Polaris has operated as a bridge bank.
Through AMCON, a consideration bond having a face value of N898 billion and a future value of N1.305 trillion was put into the bridge bank. The CBN had maintained that the measures were required to avoid the bank’s failure, safeguard depositors’ money, and avoid the systemic danger of its possible failing.
Groups representing shareholders have protested the transaction in the interim. Patrick Ajudua, the president of the New Dimension Shareholders Association, expressed surprise and said: “They made shareholders believe that their intervention was aimed at saving the bank from failure to protect depositor funds. But, the managers appointed by the CBN were worse.”
“The takeover of the bank did not protect minority shareholders.”
Moses Igbrude, president of Issuers and Investors Alternative Dispute Resolution Initiative (IIADRI), chastised the Federal Government for selling the bank without any thought of compensating shareholders.
To make sure that local investors are not deterred from engaging in the capital market, he encouraged the government to reevaluate its position.
