The Central Bank of Nigeria (CBN) and the Asset Management Company of Nigeria (AMCON) announced the completion of a Share Purchase Agreement (SPA) for the acquisition of 100% of the equity in Polaris Bank (‘Polaris’ or ‘the Bank’) by Strategic Capital Investment Limited (‘SCIL’)
Recall that Polaris has been operating as a bridge bank since 2018 when the Central Bank of Nigeria intervened to revoke the licence of the former Skye Bank Plc and established Polaris Bank to assume its assets and certain liabilities.
According to a statement signed by Osita Nwanisobi, director of the CBN’s corporate communications department, “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. These 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.”
“SCIL has paid an upfront consideration of N50 billion to acquire 100% of the equity of Polaris Bank and has accepted the terms of the agreement which include 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 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 (3) 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.”
“Commenting on the transaction Mr. Godwin I. Emefiele, Governor of the Central Bank of Nigeria said: “This sale marks the completion of a landmark intervention in a strategic institution in the Nigerian banking sector by the CBN and AMCON. We commend the outgoing board and management for their vital role since the bridge bank was established; in stabilising the Bank’s operations, its balance sheet and implementing strong governance structures to address the issues that led to the intervention. This process has provided the CBN with an unprecedented opportunity to recover its intervention funds in full and promote financial stability and inclusive growth. We wish SCIL well as they implement growth plans to build the bank from the strong foundations that have been established.”
The House of Representatives on Wednesday approved the sale of the bank, stating that the acquisition followed laid down procedure and the relevant presidential approval.
The Bank has constituted a new Board of Directors with Muhammad Ahmad remaining the chairman and former Executive Director at Union Bank, Adekunle Sonola, as its new Managing Director and Chief Executive Officer.
An official statement from the bank revealed that the new Board “will be led by the existing Chairman M K Ahmad. He will be joined on the board by 7 non-executive directors and 3 executive directors, bringing extensive experience in the banking and wider financial services sector in Nigeria and internationally, and expertise in corporate governance, human resource management, law and regulation.”
The other board members include Abubakar Suleiman, non-executive director; Salma Mohammed, non-executive director; Adeleke Adedipe, non-executive director; Ahmed Almustapha, non-executive director; Francesco Cuzzocrea, non-executive director; Olabisi Odunowo, non-executive director, Abdullahi Mohammed (executive director), and Segun Opeke (executive director).
The Chairman said, “I would like to thank the outgoing board members profusely for their hard work and dedication over the last four years as we have established a strong governance structure and stabilised the bank.”
“I am very pleased with the progress we have been able to make, and that we have delivered on our mandate to prepare the bank for a return to private ownership. I am personally proud to have been asked to lead the bank into an exciting new future and I look forward to working with the new board and our core investors to build on the platform we have created.”
Adekunle Sonola added that the new board would ensure that it sustains the growth of the bank.
“We are excited to participate in the next phase of growth for Polaris Bank and to have been able to recruit such an experienced and diverse board of directors we are confident can lead Polaris Bank into a new era of sustainable growth.
“This is an exciting time for the Nigerian financial services industry and we are committed to building on the strong foundations that have been established by the departing board. We would like to express our thanks for their service and wish them well.”
The article was updated to reflect the new board
