The Central Bank of Nigeria on Wednesday said the divestment from Polaris Bank was an institutional decision that was thoroughly supervised.
The apex bank had, in October 2022, announced the sale of
Polaris Bank to Strategic Capital Investment Limited (SCIL), four years after
the government took over Skye Bank. The bank was later renamed and over N1
trillion was subsequently injected into the bank.
The bank had announced SCIL as the preferred bidder for the
lender after it completed a Share Purchase Agreement (SPA) for the acquisition
of 100 per cent of the equity in Polaris Bank.
Since the acquisition plan was completed, there have been
reports alleging subversion of due process in the divestment process.
In a statement signed on Wednesday by the spokesperson of
the CBN, Osita Nwanisobi, the apex bank said it felt the need to clear the air
on the divestment process following a “spurious, malicious, and misleading”
online publication.
“Contrary to claims in the aforementioned online
publication, the divestment from Polaris Bank was supervised by a Divestment
Committee (Committee) comprising senior representatives of AMCON & CBN and
supported by reputable legal and financial advisers.
“In addition, the divestment mode, process and decision
received requisite board and regulatory approvals.”
The statement said that no other party made a higher
purchase offer as alleged by the 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.”
CBN said the divestment was executed based on the relevant
laws, global best practices for bank resolutions, and requisite regulatory
approvals.
It also said 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 and reserve price, funding structure and financial capacity, strategy
and growth plans, amongst others.
“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.
“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,” the bank said.
It said the 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.
“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,” the bank said.
It said the 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,” it said.
The CBN said the publication was curiously-timed and it
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,” the bank said.