By Omobolanle Shosanya
The Central Bank of Nigeria,Wednesday,cleared air on the
the recent sale of the Federal Government’s interest in Polaris Bank Limited to new investors.
The apex bank spokesman,Osita Nwanisobi said in a statement that the action was propelled by spurious, malicious, and misleading being circulation by an online publication.
A new core investor of Polaris Bank,Strategic Capital Investment Limited (SCIL),on October 2022 which was announced by the Central Bank of Nigeria and Assets Management Company of Nigeria.
He said the divestment from Polaris Bank was supervised by a Divestment Committee(Committee) comprising senior representatives of Asset Management Company of Nigeria,AMCON and Central Bank of Nigeria,CBN and supported by reputable legal and financial advisers.
Thee divestment mode, process and decision received requisite board and regulatory approvals,he said,adding that at no time did any other party make a higher purchase offer as falsely claimed by the online publication.
He explained that 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.
He said:”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”.
He also clarified that 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, he said,conducted a rigorous technical and financial evaluation of the purchase proposals, assessing promoters’ fitness and propriety,offer price received through reserve price, funding structure and financial capacity, strategy and growth plans, amongst others.
According to him,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.
The promoters also made the highest financial offer for the bank, which was significantly above its core valuation and reserve price in addition to passing all fitness and propriety tests.
He said CIL’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.
He disclosed that the offer was the most competitive and provided taxpayers and the Federal Government with more thanfull recovery ofits intervention cost. By the sale, the CBN and Federal Government achieved a successful, value-driven resolution of a strategic financial institution.
He added:”This curiously-timed online publication deliberately misrepresents the circumstances surrounding the sale of a strategic asset of the Federal Government. Its misleading statements are obviously intended to undermine the credibility of the divestment process.It also portends negatively on the stability of Polaris Bank and risks derailing the progress made by the monetary authorities.
“We reiterate 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.The CBN remains resolute in pursuing its mandate to promote a safe and sound financial system in Nigeria.”
