BY BAMIDELE FAMOOFO
The Central Bank of Nigeria has debunked claims that it did not follow due process in transferring the 100 percent equity of the Federal Government in Polaris Bank to the successful core investor-Strategic Capital Investment Limited.
The CBN made this known in a statement signed and issued by Osita Nwanisobi, Director of Communications on Wednesday.
The Apex Bank noted that the emergence of SCIL was based on due process, noting that it was the best deal for government.
“Following evaluation, the promoters of the strategic purpose vehicle, SCIL, emerged as the preferred purchaser, having presented the most comprehensive technical/financial purchase proposal and the highest-rated growth plans for Polaris Bank,” CBN disclosed.
“In addition to passing all fitness and propriety tests, the promoters also made the highest financial offer for the bank, which was significantly above its core valuation and reserve price. SCIL’s binding offer involved an immediate upfront consideration of N50 billion and full responsibility for the debt of N1.305 trillion owed to AMCON, essentially a total purchase consideration of N1.355 trillion. This offer was the most competitive and provided taxpayers and the Federal Government with more than full recovery of its intervention cost. By the sale, the CBN and Federal Government achieved a successful, value-driven resolution of a strategic financial institution,” the Bank added.
The CBN claimed that at no time did any other party make a higher purchase offer as falsely claimed by an online publication.
“The entity in question, Fairview Acquisition Partners, had indicated an interest in acquiring two banks, including Polaris Bank, for a total sum of N1.2 trillion, an indicative offer which significantly discounted the existing N1.305 trillion debt owed by Polaris Bank to AMCON and so represented a material loss to the Federal Government.”
“Notwithstanding, along with twenty-four (24) other parties, Fairview Acquisition Partners was invited by the financial advisors to participate in the sale process via the execution of a Non-Disclosure Agreement (NDA), the first stage of the process. The financial advisors informed the Committee that Fairview Acquisition Partners neither executed nor returned the NDA despite verbally confirming receipt of the agreement and after follow-up from the financial advisors.”
“Therefore, Fairview Acquisition Partners did not take the opportunity to update their offer by participating in the divestment process and thus did not make a binding purchase offer for Polaris Bank. The divestment was executed based on the relevant laws, global best practices for bank resolutions, and requisite regulatory approvals. The Committee, along with its legal and financial advisers, conducted a rigorous technical and financial evaluation of the purchase proposals, assessing promoters’ fitness and propriety, offer price received vs. reserve price, funding structure and financial capacity, strategy and growth plans, amongst others.”
According to Nwanisobi, the CBN reiterates that the divestment from Polaris Bank was an institutional decision supervised by a Committee comprising senior representatives of AMCON & CBN, coordinated through reputable legal and financial advisers and approved by the respective leadership and boards of the two institutions.
He added that the CBN remains resolute in pursuing its mandate to promote a safe and sound financial system in Nigeria.
