On Thursday, the Central Bank of Nigeria (CBN) and the Asset Management Corporation of Nigeria (AMCON) announced that Strategic Capital Investment Limited (SCIL) had completed a share purchase agreement (SPA) for the acquisition of 100% of Polaris Bank’s equity.
According to a statement made by CBN spokesman Osita Nwanisobi on behalf of the CBN and AMCON, SCIL paid an upfront consideration of N50 billion to acquire 100% of Polaris Bank’s equity and had accepted the terms of the agreement, which included paying back the full amount of N1.305 trillion, which represented the consideration bonds that were injected.
This is coming after the House of Representatives on Wednesday okayed the sale of Polaris Bank, noting that the acquisition followed laid down procedure and the relevant presidential approval.
Polaris Bank 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) was 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’ fund, prevent job losses and preserve systemic financial stability.
According to the statement on Thursday, “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.”
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.”