Strategic Capital Investment Ltd acquires Polaris Bank

Polaris Bank

The Central Bank of Nigeria has announced the completion of the sale of Polaris Bank.

This was contained in a statement from the CBN’s director of corporate communications, Osita Nwanisobi, on Thursday.

In it, the CBN announced the bank’s new lead investor as Strategic Capital Investment Limited.

Nwanisobi said in the statement that the deal was struck with SCIL by the CBN and Asset Management Company of Nigeria.
He announced the conclusion of a share purchase agreement for the acquisition of 100% of the shares of Polaris Bank by SCIL.

He added: Polaris has been operating as a bridge bank since 2018 when the Central Bank of Nigeria intervened to revoke the license of the former Skye Bank Plc and established Polaris Bank to assume its assets and certain liabilities. As part of the CBN’s intervention, counterpart bonds with a face value of N898 billion (future value N1.305 billion) were injected into the bridge bank through AMCON, to be redeemed over a 25 year period. These measures were taken to prevent the imminent collapse of the bank, allow its stabilization and recovery, protect depositors’ funds, prevent job losses and preserve systemic financial stability.
“SCIL has paid an initial consideration of N50 billion to acquire 100% equity in Polaris Bank and has agreed to the terms of the agreement which include the full repayment of the sum of N1.305 trillion, being the counterparty bonds injected . The CBN thus received an immediate return for the value it created in Polaris Bank during the stabilization period, while ensuring that all funds initially provided to support the intervention are recovered.

“The sale was coordinated by a divestment committee made up of representatives from CBN and AMCON, and advised by legal and financial consultants. The Committee conducted a sale process by “treaty by mutual agreement” as required by section 34(5) of the AMCON Act to avoid negative speculation, conserve value and preserve the stability of the financial system. As part of the process, parties that had formally expressed interest in acquiring Polaris Bank, following the CBN’s intervention in 2018, were invited to submit financial and technical proposals. Invitations to submit proposals were sent to 25 pre-selected interested parties, of which three (3) parties eventually submitted final purchase proposals after technical evaluation. All submissions went through a rigorous transaction process from which SCIL emerged as the preferred bidder with the most comprehensive technical/financial purchase proposal as well as the highest rated growth plans for Polaris Bank.

Commenting on the transaction, CBN Governor Godwin Emefiele 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 of Directors and management for their vital role since the establishment of the bridge bank; stabilize the Bank’s operations, balance sheet and put in place strong governance structures to address the issues that led to the intervention.

“This process has provided the CBN with an unprecedented opportunity to fully recover its intervention funds 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 laid.”

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