CBN completes sale of Polaris Bank for N50bn

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The Central Bank of Nigeria (CBN) and the Asset Management Company of Nigeria (AMCON) on Thursday confirmed the sale of Polaris Bank. This followed the completion of a Share Purchase Agreement (SPA) for the acquisition of a 100 percent stake in Polaris Bank by Strategic Capital Investment Limited (‘SCIL’).

The House of Representatives had on Wednesday Okayed the sale of the bank, noting that the acquisition followed the laid down procedure and the relevant presidential approval.

The Chairman of the House ad-hoc Committee investigating the sale of Polaris Bank, Henry Nwabuba, told journalists that 35 companies bided for the bank. Nwabuba’s revelation came a few days after Nigerians criticized the CBN for planning to sell Polaris Bank for N50 billion.

The amount raised eyebrows given that over N1.2 trillion had been spent by AMCON to revive the bank. In a statement issued by its Director of Corporate Communications, Osita Nwanisobi, the CBN said that SCIL has paid upfront of N50 billion to acquire a 100 percent stake in Polaris Bank

The apex bank added that SCIL accepted the terms of the agreement, including the full repayment of the sum of N1.305 trillion as the value of the bonds when the licence of the former Skye Bank Plc was revoked in 2018 to assume its assets and certain liabilities. The statement read: “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 by Strategic Capital Investment Limited (‘SCIL’).

“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. 

“These actions were taken to prevent the imminent collapse of the bank, enable its stabilization and recovery, protect depositors’ fund, prevent job losses and preserve systemic financial stability. SCIL 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 stabilization period, as well as ensuring that all funds originally provided to support the intervention are recovered. The sale was coordinated by a Divestment Committee comprising representatives of the CBN and AMCON, and advised by legal and financial consultants. 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.

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