Following the approval of the sale of Polaris Bank by the House of Representatives on Wednesday, the Central Bank of Nigeria (CBN) and the Asset Management Corporation of Nigeria (AMCON) have formally announced that the bank has been completely acquired by Strategic Capital Investment Limited (SCIL).
SCIL completed a Share Purchase Agreement (SPA) for the acquisition of 100% of the bank’s equity in a transaction the House said it followed due process and was duly approved by the presidency.
Osita Nwanisobi, the director, corporate communications department at the CBN, said in a statement that for the 100% equity, SCIL paid an upfront consideration of N50 billion. He said the company also accepted the terms of the agreement, which includes repayment of the consideration bond injected into the troubled bank that amounted to N1.305 trillion.
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“The CBN thus received an immediate return for the value it has created in Polaris Bank during the stabilization period, as well as ensuring that all funds originally provided to support the intervention are recovered.
“The sale was coordinated by a Divestment Committee (the ‘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 statement said.
AMCON, the government’s bad debt buyer, took over Skye Bank in 2018 after the CBN withdrew its license and set up Polaris as a bridge bank.
As part of its intervention, the CBN injected consideration bonds with a face value of N898 billion into Polaris Bank through AMCON. The fund, which was injected to save the bank from collapse and to enable its recovery and stability, has a future value of N1.305 trillion that will be repaid by the bank’s new owners in 25 years.
Speaking on the bank’s acquisition, the CBN Governor, Godwin Emefiele, lauded the outgoing board and management of Polaris Bank for keeping it afloat since it was established as a bridge bank. He said the board and management were notable for their roles in stabilizing the Bank’s operations, its balance sheet and implementing strong governance structures to address the issues that led to the intervention.
The apex bank head said the process has provided the CBN with an unprecedented opportunity to recover its intervention funds in full and promote financial stability and inclusive growth.
“The sale of the bank marks the completion of a landmark intervention in a strategic institution in the Nigerian banking sector by the CBN and AMCON,” he said.