- As Reps back acquisition by SCIL
The conclusion of a Share Purchase Agreement (SPA) for the acquisition of Polaris Bank’s entire stock by Strategic Capital Investment Limited (hereafter referred to as “SCIL”) has been officially declared by the Central Bank of Nigeria (CBN) and the Asset Management Company of Nigeria (AMCON).
The House of Representatives approved the sale of Polaris Bank on Wednesday, noting that the acquisition followed the established procedure and received the necessary presidential approval.
According to a statement made by the Central Bank of Nigeria’s (CBN) Director of Corporate Communications, Osita Nwanisobi, on behalf of the CBN and AMCON, SCIL had paid an upfront consideration of N50 billion to acquire 100% of Polaris Bank’s equity and had also agreed to the terms of the agreement, which include the full repayment of the sum of N1.305 trillion, which represents the consideration bonds that were injected.
The CBN “therefore obtained an immediate return for the value it has created in Polaris Bank during the stabilization phase, and ensured that all funds originally granted to support the intervention are returned,” the statement reads.
“A Divestment Committee (the “Committee”) composed of officials of the CBN and AMCON coordinated the transaction while receiving advice from legal and financial advisers. In order to minimize unfavorable speculative speculation, maintain value, and safeguard the stability of the financial system, the Committee carried out a sale process by “private treaty,” as permitted by Section 34(5) of the AMCON Act. Following the CBN intervention in 2018, parties who had formally shown an interest in acquiring Polaris Bank were invited to submit financial and technical offers as part of the process. 25 pre-qualified interested parties received invitations to submit offers; three (3) of these parties ultimately submitted final acquisition proposals after technical review.
According to the Governor, the process has provided the CBN with an unprecedented opportunity to recover its intervention funds in full and promote financial stability and inclusive growth. He wished SCIL well as they implement growth plans to build the bank from the strong foundations that have been established.”
It will be recalled that 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) were injected into the bridge bank through AMCON, to be repaid over a 25-year period. The Bank noted that the actions were taken to prevent the imminent collapse of the bank, enable its stabilisation and recovery, protect depositors’ funds, prevent job losses and preserve systemic financial stability.
Speaking on the acquisition on Wednesday, October 19, 2022, the chairman of the Ad-hoc Committee investigating the sale of Polaris Bank, Hon. Henry Nwawuba said that the lawmakers during the scrutiny of various documents and extant regulatory processes on the sale of the bank discovered that there was evidence of substantial compliance with the process