Nigeria’s Union Bank Signs $750 Million Agreement With Group

March 23 (Bloomberg) -- Union Bank of Nigeria Plc, a lender bailed out by the nation’s central bank in 2009, signed a memorandum of agreement with a group led by African Capital Alliance that will invest $750 million in the bank.

The group, which will invest as Union Global Partners Ltd., includes ABC Holdings Ltd., a Botswanan lender, TRG Management LLP, Keffi Group VIII LLC, which comprises New York-based Keffi Group and other U.S. institutional investors, the company said in an e-mailed statement from Lagos today.

“By this agreement, African Capital Alliance has emerged as the preferred core investor of Union Bank,” Francis Barde, principal manager of corporate affairs at the lender, said in a phone interview today.

A debt crisis in Nigeria’s banking industry in 2009 forced the central bank to rescue some of country’s lenders by injecting 620 billion naira ($4.1 billion) of capital into them. Eight of the lenders’ chief executive officers were fired and the central bank called for interested parties to bid for stakes in the banks. The transaction between Union Bank of Nigeria and African Capital is the first such agreement announced by any of the rescued banks.

Union Bank shares climbed to the highest in more than a week, adding 2.2 percent to 3.19 naira by the 2:30 p.m. close in Lagos.

Future Mergers

Central bank Governor Lamido Sanusi said on March 4 that two rescued banks have signed accords to receive more capital, either through mergers or acquisitions, and four others are close to signing takeover agreements.

Nigeria’s banking industry will have as many as eight mergers in the “near future,” most of them within weeks, Deputy Governor Kingsley Moghalu said Feb. 22.

Asset Management Corp. of Nigeria, a state-owned company, is seeking approval from the central bank to start the second phase of its program to buy bad debts from banks, according to Chief Executive Officer Mustapha Chike-Obi.

Amcon, as the company is known, on Dec. 31 signed debt purchase agreements with 21 of Nigeria’s 24 banks and issued 1.04 trillion naira ($6.8 billion) of so-called consideration bonds that are not tradable to buy non-performing loans from them.
 

culled from businessweek.com

 

Get in touch: 01-2773210
Copyright © 2014. AMCON, Inc. All Rights Reserved   |   Legal