We sold Polaris Bank through due process to Strategic Capital – CBN

Few days after an online publication claimed that Polaris Bank was sold at a paltry sum of N50 billion to Strategic Capital, a financial business interest which President Muhammadu Buhari’s uncle, Mamman Daura has interest, the Central Bank of Nigeria (CBN) has described the report as misleading.

The apex bank said, it was reacting to the claim by an online, given its grave consequences to the stability of the bank, financial sector and the Nigerian economy.

In a statement issued on Wednesday by Osita Nwan¬isobi, Director, Corporate Communications of the CBN, said, “At no time did any other party make a higher purchase offer as falsely claimed by the online publication. The entity in question, Fairview Acquisition Partners, had indicated an interest in acquiring two banks, including Polaris Bank, for a total sum of N1.2 trillion, an indicative offer that significantly discounted the existing N1.305 trillion.”

The CBN said, it drew attention of the public to the statement dated October 20, 2022, by CBN and AMCON announcing the sale of 100 percent equity in Polaris Bank to a new core investor, Strategic Capital Investment Limited (SCIL), wherein it provided copious details of the process by which the sale was conducted, hence the report was laced with inaccuracies.

The statement said: “Contrary to claims in the aforementioned online publication, the divestment from Polaris Bank was supervised by a Divestment Committee (Committee) comprising senior representatives of AM¬CON and CBN and supported by reputable legal and financial advisers. In addition, the divestment mode, process and decision received requisite board and regulatory approvals”, the bank said.

“Notwithstanding, along with twenty-four other par¬ties, Fairview Acquisition Partners was invited by the financial advisors to participate in the sale process via the execution of a Non-Disclosure Agreement (NDA), the first stage of the process. The financial advisors informed the Committee that Fairview Acquisition Partners neither executed nor returned the NDA despite verbally con¬firming receipt of the agreement and after follow-up from the financial advisors”.

It added that Fairview Acquisition Partners did not take the opportunity to update their offer by participating in the divestment process and thus did not make a binding purchase offer for Polaris Bank.
The divestment, according to the CBN, was executed based on the relevant laws, global best practices for bank resolutions, and requisite regulatory approvals.

“The Committee, along with its legal and financial advisers, conducted a rigorous technical and financial evaluation of the purchase proposals, assessing promoters’ fitness and propriety, of¬fer price received vs. reserve price, funding structure and financial capacity, strategy and growth plans, amongst others.

“Following evaluation, the promoters of the strategic purpose vehicle, SCIL, emerged as the preferred purchaser, having present¬ed the most comprehensive technical/financial purchase proposal and the highest-rat¬ed growth plans for Polaris Bank. In addition to passing all fitness and propriety tests, the promoters also made the highest financial offer for the bank, which was significantly above its core valuation and reserve price.

“SCIL’s binding offer involved an immediate upfront consideration of N50 billion and full responsibility for the debt of N1.305 trillion owed to AMCON, essentially a total purchase consideration of N1.355 trillion. This offer was the most competitive and provided taxpayers and the Federal Government with more than full recovery of its intervention cost. By the sale, the CBN and Federal Government achieved a successful, value-driven resolution of a strategic financial institution”.

This curiously-timed on¬line publication, according to the bank, deliberately misrepresents the circumstances surrounding the sale of a strategic asset of the Federal Government.

“Its misleading statements are obviously intended to undermine the credibility of the divestment process. It also portends negatively on the stability of Polaris Bank and risks derailing the progress made by the monetary authorities.

“We, therefore, reiterate that the divestment from Po¬laris Bank was an institutional decision supervised by a committee comprising senior representatives of AMCON and CBN, coordinated through reputable legal and financial advisers and approved by the respective leadership and boards of the two institutions”, the bank concluded.