The Central Bank of Nigeria (CBN) on Wednesday clarified the recent sale of the federal government’s interest in Polaris Bank Limited to a new core investor, Strategic Capital Investment Limited (SCIL).
The central bank also said the N1.36 trillion offer for Polaris Bank by SCIL remained the, “most competitive and provided taxpayers and the federal government with more than full recovery of its intervention cost” adding that “By the sale, the CBN and federal government achieved a successful, value-driven resolution of a strategic financial institution”.
The bank’s stated that the explanation came against the backdrop of a “spurious, malicious, and misleading online publication, which made several false claims concerning the recent sale”.
The CBN insisted that the divestment mode, process, and decision received requisite board and regulatory approvals.
The apex bank, in a statement issued by the CBN Director, Corporate Communications Department, Mr. Osita Nwanisobi, insisted that the divestment was executed based on the relevant laws, global best practices for bank resolutions, and requisite regulatory approvals.
The apex bank further stated that contrary to claims in the 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 central bank added that “At no time did any other party make a higher purchase offer as falsely claimed by the online 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 that significantly discounted the existing N1.305 trillion debt owed by Polaris Bank to AMCON and so represented a material loss to the federal government.”
The bank explained that notwithstanding, Fairview Acquisition Partners alongside 24 other parties, 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 statement added that 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 CBN added: “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.”
It stressed that 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.”
The CBN, however, insisted the divestment from Polaris Bank was an institutional decision supervised by a committee comprising senior representatives of AMCON and CBN, coordinated through reputable legal and financial advisers, and approved by the respective leadership and boards of the two institutions.
“We remain resolute in pursuing its mandate to promote a safe and sound financial system in Nigeria,” the CBN added.
The CBN said it was constrained to correct the inaccuracies in the online publication given the potentially grave implications for the stability of the bank, financial sector, and the Nigerian economy.
The statement added, “For the records, the public is referred to the statement dated October 20, 2022, by CBN & AMCON announcing the sale of 100 per cent 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 & CBN and supported by reputable legal and financial advisers. In addition, the divestment mode, process, and decision received requisite board and regulatory approvals.”
It said, “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.
“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.”
The apex bank added that “This curiously-timed online publication deliberately 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.
“We reiterate that the divestment from Polaris Bank was an institutional decision supervised by a committee comprising senior representatives of AMCON and CBN, coordinated through reputable legal and financial advisers, and approved by the respective leadership and boards of the two institutions.”
James Emejo in Abuja and Nume Ekeghe in Lagos
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