The Central Bank of Nigeria and AMCON have sold shares in Polaris Bank to Strategic Capital Investment Limited (SCIL).
This was confirmed by the CBN in a press release on its website on Thursday, October 20, 2002.
“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’)”, said CBN.
The CBN 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.
The confirmation of the sale of the bank to Strategic Capital Investment Limited happened after denials by Polaris Bank that a sale was being consummated by the apex bank and AMCON.
In addition to the controversy surrounding the denials, the House of Reps also directed that the CBN halt the sale of the bank insisting that it has to be transparent and competitive.
“The suspension will subsist until the Central Bank of Nigeria (CBN), the Nigeria Deposit Insurance Corporation (NDIC), and the Asset Management Corporation of Nigeria (AMCON) have concluded all processes for the open, transparent, and competitive bid process.”
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.
The CBN also stated that 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 stabilisation period, as well as ensuring that all funds originally provided to support the intervention are recovered.”
