The Central Bank of Nigeria (CBN) and the Asset Management Company of Nigeria (AMCON) have formally announced the sale of Polaris bank.
The sale follows the completion of a Share Purchase Agreement (SPA) for the acquisition of 100 per cent of the equity in Polaris Bank by Strategic Capital Investment Limited (‘SCIL’).
The sale is coming as the House of Representatives on Wednesday, 19 October 2022, okayed the sale of Polaris Bank.
In a statement signed by its Director, Corporate Communications Department, Osita Nwanisobi, the CBN said that SCIL has paid an upfront consideration of N50 billion to acquire 100% of the equity of Polaris Bank.
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The new company CBN Nwanisobi added that it accepted the terms of the agreement, including the full repayment of the sum of N1.305 trillion, being the value of the bonds, which as part of its intervention in 2018, to revoke the licence of the former Skye Bank Plc.
The New telegraph report added that the money was injected into Polaris through the Asset Management Corporation of Nigeria and is to be repaid over a 25-year period.
CBN STATEMENT READS:
“The Central Bank of Nigeria (CBN) and the Asset Management Company of Nigeria (AMCON) are pleased to announce the completion of a Share Purchase Agreement (SPA) for the acquisition of 100% of the equity in Polaris Bank by Strategic Capital Investment Limited (‘SCIL’).
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“Polaris has been operating as a bridge bank since 2018 when the Central Bank of Nigeria intervened to revoke the licence of the former Skye Bank Plc. and established Polaris Bank to assume its assets and certain liabilities.
As part of the CBN intervention, consideration bonds with a face value of N898 billion (future value of N1.305 trillion) was injected into the bridge bank through AMCON, to be repaid over a 25-year period.
“These actions were taken to prevent the imminent collapse of the bank, enable its stabilisation and recovery, protect depositors’ fund, prevent job losses and preserve systemic financial stability. SCIL has paid an upfront consideration of N50 billion to acquire 100% of the equity of Polaris Bank and has accepted the terms of the agreement which include the full repayment of the sum of N1.305 trillion, being the consideration bonds injected.
“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.
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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 CBN Governor, Godwin Emefiele, was quoted as saying, the sale marks the completion of a landmark intervention in a strategic institution in the Nigerian banking sector by the CBN and AMCON.
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THE STATEMENT CONTINUES:
“We commend the outgoing board and management for their vital role since the bridge bank was established; in stabilising the Bank’s operations, its balance sheet and implementing strong governance structures to address the issues that led to the intervention.
“This process has provided the CBN with an unprecedented opportunity to recover its intervention funds in full and promote financial stability and inclusive growth. We wish SCIL well as they implement growth plans to build the bank from the strong foundations that have been established.”
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