The sale of Polaris Bank to a new core investor, Strategic Capital Investment Ltd. (SCIL), has been made public by the Central Bank of Nigeria (CBN).
A statement signed by Mr. Osita Nwanisobi, Director, Corporate Communications, and posted on the CBN website on Thursday said that the sale was completed after SPA signed a Share Purchase Agreement (SPA) to buy all of the bank’s stock.
Since the CBN intervened in 2018 and suspended the license of the erstwhile Skye Bank Plc, Polaris has been operating as a bridge bank.
Polaris Bank was also founded to take over its assets and some of its liabilities.
The Asset Management Company of Nigeria (AMCON) injected consideration bonds with a face value of N898 billion (future value of N1.305 trillion) into the bridge bank as part of the CBN intervention, to be repaid over a 25-year period.
These steps were done in order to stop the bank’s impending collapse, enable its stabilization and recovery, safeguard depositor funds, avoid job losses, and maintain systemic financial stability.
It stated that SCIL had paid an upfront price of N50 billion to purchase 100% of Polaris Bank’s equity.
The statement said that it had also agreed to the conditions of the contract, which included paying back the entire sum of N1.305 trillion, which represented the value of the bonds used as consideration.
It said, “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.”
After the CBN involvement in 2018, parties who had formally shown an interest in acquiring Polaris Bank were reportedly invited to make financial and technical offers as part of the process.
“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,” it said.
The CBN’s governor, Mr. Godwin I. Emefiele, commented on the deal, saying: “This sale represents the conclusion of a major intervention by the CBN and AMCON in a critical institution in the Nigerian banking system.
“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.”
