Strategic Capital Investment Limited has completed the acquisition of the entire Polaris Bank shares for N50 billion.
The Central Bank of Nigeria which announced the sale of the bank in a press release on its website on Thursday said it worked in partnership with AMCON to complete the sale.
“The Central Bank of Nigeria (CBN) and the Asset Management Company of Nigeria (AMCON) are pleased to announce the completion of a Share Purchase Agreement (SPA) for the acquisition of 100% of the equity in Polaris Bank (‘Polaris’ or ‘the Bank’) by Strategic Capital Investment Limited (‘SCIL’),” it announced.
The apex bank claimed SCIL has paid the upfront of N50 billion and in accepting the terms will repay fully the sum of N1.305 trillion being the consideration bonds injected by the CBN.
Whilst, the bank was sold for N50 billion, the repayment of N1.3 trillion means the bank will have to pay Polaris Bank about N52 billion a year in redeeming the bonds raised by AMCON.
For the bank to repay the loans they will have to generate profits in excess of N60 billion over the next 25 years or whatever is left of the bank’s tenure.
Experts further suggest that the owners may have to explore an equity raise, sale of assets, issuing more bonds, and from its profit or explore a merger with a much bigger bank
CBN governor, Godwin Emefiele speaking on the sale 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 and management for their vital role since the bridge bank was established; in stabilizing the Bank’s operations, and its balance sheet and implementing strong governance structures to address the issues that led to the intervention. This process has provided the CBN with an unprecedented opportunity to recover its intervention funds in full 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 established.”