Sale of Polaris Bank followed due process

The Central Bank of Nigeria on Wednesday said the divestment from Polaris Bank was an institutional decision that was closely monitored.

The apex bank has, the October 2022, announced the sale of Bank Polaris for Strategic Capital Investment Limited (SCIL), four years after the government took over Skye Bank. The bank was later renamed and over N1 trillion was later injected into the bank.

The bank announced SCIL as the preferred bidder for the lender after concluding a Share Purchase Agreement (SPA) for the acquisition of 100 per cent equity in Polaris Bank.

Since the acquisition plan has been completed, there have been reports that the subversion of the process is due to the divestment process.

In a statement signed on Wednesday by the CBN spokesperson, Osita Nwanisobi, the apex bank said it needed to clear the air on the divestment process following “false, malicious and misleading” online publications.

“Contrary to the statement in the above-mentioned online publication, the divestment of Bank Polaris is overseen by the Divestment Committee (Committee) which includes senior representatives of AMCON & CBN and is supported by reputable legal and financial advisors.

“In addition, the mode of divestment, process and decision received the approval of the board and the necessary regulations.”

The statement said no other party had made a higher purchase offer as alleged by the publication.

“The entity, Fairview Acquisition Partners, has expressed interest in acquiring two banks, including Polaris Bank, for a total sum of N1.2 trillion, an indicative offer that reduces the debt of N1.305 trillion owed by Polaris Bank. to AMCON and represents a material loss for the Federal Government.

“However, together with twenty-four (24) other parties, Fairview Acquisition Partners was invited by the financial advisor to participate in the sale process through the execution of a Non-Disclosure Agreement (NDA), the first stage of the process.

“The financial advisor informed the Committee that Fairview Acquisition Partners did not execute or return the NDA despite verbally confirming the agreement and after follow-up from the financial advisor.

“Therefore, Fairview Acquisition Partners did not take the opportunity to renew the offer by participating in the divestment process and thus did not make a purchase offer for Polaris Bank.”

The CBN said the divestment was done based on relevant laws, global best practices for bank resolution, and necessary regulatory approvals.

In addition, the committee, together with legal and financial advisors, conducts a strict technical and financial evaluation of the purchase proposal, evaluates the fitness and propriety of the promoter, the price of the accepted offer and the reserve price, the financing structure and financial capacity, strategy and growth plan. , among others.

“After evaluation, the promoter of the strategic destination vehicle, SCIL, emerged as the preferred buyer, offering the most complete technical/financial purchase proposal and the highest growth plan for Polaris Bank.

“In addition to passing all the fitness and propriety tests, the promoter also made the highest financial offer to the bank, which was higher than the core value and the reserve price,” the bank said.

He said SCIL’s binding offer involved an initial consideration of N50 billion and full responsibility for the debt of N1.305 trillion owed to AMCON, meaning a total purchase consideration of N1.355 trillion.

“This offer is the most competitive tax payer and provides taxpayers and the Federal Government with more than the cost of the intervention. By selling, the CBN and the Federal Government achieve a successful resolution, based on the value of the strategic financial institution,” he said.

The CBN said the publication was timely and blamed the circumstances surrounding the sale of strategic assets of the federal government.

“The misleading statement clearly undermines the credibility of the divestment process. It also reflects the stability of Polaris Bank and the risk of disrupting the progress made by the monetary authorities,” the bank said.