The Central Bank of Nigeria (CBN) says the sale of Polaris Bank to Strategic Capital Investment Limited (SCIL), the new core investor, followed due process.
An online report had claimed that the CBN failed to sell the bank to Fairview Acquisition Partners (FAP), which offered a higher purchase price of N1.2 trillion.
But in a statement on Wednesday, signed by Osita Nwanisobi, director of CBN’s corporate communications, the apex bank refuted the claims, saying it was inaccurate.
It said SCIL, which acquired its 100 percent equity stakes in Polaris Bank, made the highest purchase offer of N1.355 trillion.
“The attention of the Central Bank of Nigeria (CBN) has been drawn to a spurious, malicious, and misleading online publication, which made several false claims concerning the recent sale of the federal government’s interest in Polaris Bank Ltd.,” the statement reads.
“Given the potentially grave implications for the stability of the bank, financial sector, and the Nigerian economy, the CBN is constrained to correct these inaccuracies.
“For the records, the public is referred to the statement dated October 20, 2022 by CBN and AMCON announcing the sale of 100 percent equity in Polaris Bank to a new core investor, Strategic Capital Investment Limited (SCIL), wherein it provided copious details of the process by which the sale was conducted.
“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 and CBN and supported by reputable legal and financial advisers. In addition, the divestment mode, process and decision received requisite board and regulatory approvals.”
‘NO OTHER PARTY MADE A HIGHER PURCHASE OFFER’
The CBN also said the offer made by FAP significantly discounted the existing debt owed by Polaris Bank to AMCON.
According to the bank, the company did not make a binding purchase offer on Polaris Bank.
“At no time did any other party make a higher purchase offer as falsely claimed by the online publication,” the CBN said.
“The entity in question, Fairview Acquisition Partners, had indicated an interest in acquiring two banks, including Polaris Bank, for a total sum of 1.2 trillion, an indicative offer which significantly discounted the existing 1.305 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.
The Central Bank of Nigeria (CBN) says the sale of Polaris Bank to Strategic Capital Investment Limited (SCIL), the new core investor, followed due process.
An online report had claimed that the CBN failed to sell the bank to Fairview Acquisition Partners (FAP), which offered a higher purchase price of N1.2 trillion.
But in a statement on Wednesday, signed by Osita Nwanisobi, director of CBN’s corporate communications, the apex bank refuted the claims, saying it was inaccurate.
It said SCIL, which acquired its 100 percent equity stakes in Polaris Bank, made the highest purchase offer of N1.355 trillion.
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“The attention of the Central Bank of Nigeria (CBN) has been drawn to a spurious, malicious, and misleading online publication, which made several false claims concerning the recent sale of the federal government’s interest in Polaris Bank Ltd.,” the statement reads.
“Given the potentially grave implications for the stability of the bank, financial sector, and the Nigerian economy, the CBN is constrained to correct these inaccuracies.
“For the records, the public is referred to the statement dated October 20, 2022 by CBN and AMCON announcing the sale of 100 percent equity in Polaris Bank to a new core investor, Strategic Capital Investment Limited (SCIL), wherein it provided copious details of the process by which the sale was conducted.
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“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 and CBN and supported by reputable legal and financial advisers. In addition, the divestment mode, process and decision received requisite board and regulatory approvals.”
‘NO OTHER PARTY MADE A HIGHER PURCHASE OFFER’
The CBN also said the offer made by FAP significantly discounted the existing debt owed by Polaris Bank to AMCON.
According to the bank, the company did not make a binding purchase offer on Polaris Bank.
“At no time did any other party make a higher purchase offer as falsely claimed by the online publication,” the CBN said.
“The entity in question, Fairview Acquisition Partners, had indicated an interest in acquiring two banks, including Polaris Bank, for a total sum of 1.2 trillion, an indicative offer which significantly discounted the existing 1.305 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.
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“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.
“The divestment was executed based on the relevant laws, global best practices for bank resolutions, and requisite regulatory approvals.
“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 vs. reserve price, funding structure and financial capacity, strategy and growth plans, amongst others.”
‘SCIL MADE HIGHEST FINANCIAL OFFER FOR POLARIS BANK’
Meanwhile, following evaluation, the apex bank said the promoters of the strategic purpose vehicle, SCIL, emerged as the preferred purchaser, having presented the most comprehensive technical/financial purchase proposal.
CBN said the company also presented 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,” it said.
“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.”
AN INSTITUTIONAL DECISION
CBN also emphasised that the divestment from Polaris Bank was an institutional decision, adding that the “curiously-timed online publication deliberately misrepresents” the circumstances surrounding the sale of a strategic asset of the federal government.
According to bank, 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,” CBN added.
“We reiterate that the divestment from Polaris Bank was an institutional decision supervised by a Committee comprising senior representatives of AMCON & CBN, coordinated through reputable legal and financial advisers and approved by the respective leadership and boards of the two institutions.
“The CBN remains resolute in pursuing its mandate to promote a safe and sound financial system in Nigeria. This is for the records and attention of the general public.”