The conclusion of a share purchase agreement for the acquisition of 100% of the equity in Polaris Bank by Strategic Capital Investment Limited has been officially announced by the Central Bank of Nigeria and the Asset Management Company of Nigeria.
On Wednesday, the House of Representatives approved the sale of Polaris Bank, noting that the transaction adhered to established protocol and had the necessary presidential permission.
According to a statement released by the Central Bank of Nigeria’s 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 accepted the terms of the agreement, which include the full repayment of the sum of N1.31 trillion, which represents the consideration bonds that were injected.
According to the statement, “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 (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.”
In the meantime, 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,” according to Mr. Godwin Emefiele, governor of the Central Bank of Nigeria.
He praised the departing board and management for their crucial contributions to the bridge bank’s history.
The procedure, according to the governor, has given the CBN an unheard-of opportunity to recover all of its intervention money and advance financial stability and inclusive growth.
Recall that since the CBN intervened in 2018 to revoke the license of the old Skye Bank Plc and establish Polaris Bank to take over its assets and certain liabilities, Polaris has been operating as a bridge bank.
As part of the CBN intervention, AMCON injected consideration bonds into the bridge bank with a face value of N898 billion (future value of N1.31 trillion) that will be repaid over a 25-year period.
The bank claimed that the measures were adopted to avert the impending collapse of the bank, enable its stabilization and recovery, protect depositors’ funds, prevent job losses, and preserve systemic financial stability.
The chairman of the Ad-hoc Committee looking into the sale of Polaris Bank, Hon. Henry Nwawuba, commented on the acquisition on Wednesday. He said that during their examination of various documents and the ongoing regulatory process regarding the sale of the bank, the lawmakers had found evidence of significant compliance with the process.
