CBN Sells Polaris Bank to Strategic Capital Investment
The Central bank of Nigeria, CBN, has announced its final decision to sell Polaris Bank Limited to a new core investors, Strategic Capital Investment Limited after the three years of operation as bridge financial services operator.
In a statement, the apex said decision to transfer the bank assets to its new investor were jointly made with the Asset Management Company of Nigeria (AMCON).
The sales was completed via Share Purchase Agreement (SPA) for the acquisition of 100% of the equity in Polaris Bank by Strategic Capital Investment Limited.
“Polaris has been operating as a bridge bank since 2018 when the Central Bank of Nigeria intervened to revoke the licence of the former Skye Bank Plc and established Polaris Bank to assume its assets and certain liabilities.
“As part of the CBN intervention, consideration bonds with a face value of N898 billion (future value of N1.305 trillion) was injected into the bridge bank through AMCON, to be repaid over a 25-year period”.
CBN said these actions were taken to prevent the imminent collapse of the bank, enable its stabilisation and recovery, protect depositors’ fund, prevent job losses and preserve systemic financial stability.
It noted the new core investor has paid an upfront consideration of N50 billion to acquire 100% of the equity of Polaris Bank and has accepted the terms of the agreement which include the full repayment of the sum of N1.305 trillion, being the consideration bonds injected.
The CBN thus received an immediate return for the value it has created in Polaris Bank during the stabilisation period, as well as ensuring that all funds originally provided to support the intervention are recovered.
The statement reads the sale was coordinated by a Divestment Committee comprising representatives of the CBN and AMCON, and advised by legal and financial consultants.
It added that the Committee conducted a sale process by ‘private treaty’, as provided in Section 34(5) of the AMCON Act to avoid negative speculations, retain value and preserve financial system stability. READ:House of Reps Asks CBN to Suspend Sale of Polaris Bank
Commenting on the transaction Mr. Godwin I. Emefiele, Governor of the Central Bank of Nigeria 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 stabilising the Bank’s operations, 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.”
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