The Asset Management Company of Nigeria (AMCON) and the Central Bank of Nigeria (CBN) have announced the completion of a Share Purchase Agreement (SPA) for the acquisition of 100 percent of the equity in Polaris Bank by Strategic Capital Investment Limited (‘SCIL’).
The House of Representatives had on Wednesday okayed the sale of Polaris Bank, noting that the acquisition followed the laid down procedure and the relevant presidential approval.
A statement by CBN’s Director of Corporate Communications Osita Nwanisobi, said: “SCIL had paid an upfront consideration of N50 billion to acquire 100 percent of the equity of Polaris Bank and had also accepted the terms of the agreement which includes 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 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 added.
CBN Governor Godwin Emefiele was quoted as saying that 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.”
Polaris has been operating as a bridge bank since 2018 when the CBN 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 CBN noted that “the 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”.