The Central Bank of Nigeria (CBN) and the Asset Management Company of Nigeria (AMCON) have formally announced the sale of Polaris Bank.
According to reports, the sale follows the completion of a Share Purchase Agreement (SPA) for the acquisition of 100 per cent of the equity in Polaris Bank by Strategic Capital Investment Limited (‘SCIL’).
NewsClick Nigeria reports that the sale is coming as the House of Representatives on Wednesday okayed the sale of Polaris Bank, noting that the acquisition followed the laid down procedure and the relevant presidential approval.
A statement issued by the Director, the Corporate Communications Department at the Central Bank of Nigeria (CBN), Osita Nwanisobi, on behalf of the CBN and AMCON disclosed that SCIL had paid an upfront consideration of N50 billion to acquire 100% of the equity of Polaris Bank and had also accepted the terms of the agreement which include the full repayment of the sum of N1.305 trillion, being the consideration bonds 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 (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,” the statement added.
Meanwhile, the CBN Governor, Mr 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.”
He commended the outgoing board and management for their vital role since the bridge bank was established; in stabilising the Bank’s operations, and its balance sheet and implementing strong governance structures to address the issues that led to the intervention. According to the Governor, the process has provided the CBN with an unprecedented opportunity to recover its intervention funds in full and promote financial stability and inclusive growth. He wished SCIL well as they implement growth plans to build the bank from the strong foundations that have been established.”
NewsClick Nigeria reports 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.
How Polaris Bank was sold – Reps Committee
Chairman of the House of Representatives Ad hoc Committee investigating the sale of Polaris Bank, Mr Henry Nwawuba on Thursday also confirmed sale of the Bank.
According to him, the sale followed the dues process.
The lawmaker said this at a news conference at the National Assembly in Abuja.He allayed investors’ fears about the status of the financial institution, adding that there was evidence of substantial compliance with the process.
According to him, out of the 35 companies invited to bid for the bank, the regulatory agency shortlisted the bidders to 15 and later seven and afterwards got Presidential approval to proceed with the sale of the bank.
“Before we broke up from plenary sessions to work on the budget, there was a motion on the floor asking the CBN to suspend the sale of Polaris Bank, I happened to have emerged to Chairman of the committee.
“The Committee has started work and we have looked at the documents and that is the beauty of investigation in Parliament.
”The beauty is that regardless of what comes on the floor, it is only when we started looking at the documents before us that we start getting a clearer picture,” he said.
He said the committee had so far found evidence of substantial compliance in the process of selling the bank, adding that about 35 companies were invited to bid and it went down to 15 and finally to 7.
He said the recommendation was made and a presidential approval given, adding that the committee was happy with the process and intended to conclude the investigation and lay the report before the resumption of plenary.
According to him, so far, everything looks good and there is no cause for concern, adding that for the stability of the financial systems in Nigeria, the committee called on Nigerians to know there was nothing wrong with Polaris Bank.
“What the House is looking at is the process of the acquisition or the sale and so far, we are confident from what we are seeing.”
He said until the investigation was concluded, he would not be able to speak authoritatively on the matter but added that from what the committee could see, there seemed to be substantial compliance.
According to him, Nigerians are enjoined to continue to relax and leave their deposits with the bank and continue their business with the bank.
“We feel that as a responsible House, we would look at the process and that is how we oversight the sector and that is what we are looking at.
