ilost Global Inc., a New York-based private equity firm yesterday announced the termination of its proposed $1billion investment in Unity Bank Plc.
This followed the rebuttal of the planned capital injection by Unity Bank Plc, a day after the deal was made public.
The Managing Partner and CEO at Milost Global Inc., Kim Freeman disclosed this in a statement yesterday.
This is just as a top official of Unity Bank, who pleaded to remain anonymous, maintained yesterday that there was no deal between both organisation.
However, Freeman, in the statement recounted the number of times his team had discussions as well as meeting with some officials of the commercial bank.
According to him, on August 7, 2017, Milost Global received a request for a call with the CEO and CFO of Unity Bank Plc, adding that on the call, Unity Bank expressed its interest in working with Milost Global as its funding partner for its growth plans in Nigeria.
Freeman explained: “Following the call, a desk top due diligence was conducted by Milost to its satisfaction. On September 4, 2017 a $1billion financing term sheet was fully executed by both Milost and Unity Bank.
“The facility, a combo of equity and debt, was provided on the exciting understanding that Unity Bank would delist on the Nigerian Stock Exchange and move its listing to the USA. The signed term sheet was approved by the board of Unity Bank.
“On Monday, October 23, 2017 at 11:05 EST, Milost Global Inc. was visited by Mrs. Oluwatomi Somefun, the CEO of Unity Bank Plc, at its New York Offices. The meeting was scheduled for 11:00am EST and it went ahead as planned.
“The meeting was attended by Milost Global Inc. analysts and the Chairman, Mr. Egerton Forster. At the meeting, she explained the need for capital funding at the bank and also their expansion plans. It was then agreed that Milost Global Inc. would start further due diligence on Unity Bank.
“It is normal practice for all the publicly quoted companies which we fund to notify the market regulator on signature of the commitment letter since it has material effect to the stock; however, Unity Bank did not. Milost assumed that this did not happen because Unity had agreed to move its listing to the USA.”
But responding to the statement by Freeman, a top Unity Bank official said: “We are aware of the discussions, but at no time did we commit to anything. In fact, at the so called meeting they said we had in their New York, our CEO happened to be in New York and stopped by at their office just to check them out, to see if they are real or not.
“There was no commitment on our part and that is what we are quarrelling about. They sent us a letter of intent, but we did not respond. Something is not quite right.
“We sent the letter they sent to us to the Central Bank of Nigeria (CBN), just to notify the central bank and that there was no commitment. We were still asking them about the source of their fund because we weren’t sure of the source of the fund.
“We needed to be sure that they are for real because we have had all sort of clowns coming to say they want to invest in Unity Bank. The so called meetings they said we had were exploratory on both sides. It was not a formal meeting at all and the next thing we saw in the papers was that they are investing $1billion in Unity Bank.”
Continuing, Freeman stated that to the surprise of Milost, the story about the transaction broke last week, saying all the contents of the discussions contained therein were true in their entirety, except that Milost was to acquire 30 per cent of the bank, whereas in reality Milost was to take a controlling 60per cent of the bank at closing.
Freeman further revealed that the transaction would have retained the same board members and the same management for continuity of operations.
According to him, soon after the story broke, Milost started receiving threatening emails from someone “who says he is politically connected to the powers that could shut Milost out of Nigeria if Milost didn’t terminate the Unity Bank transaction.”
Freeman added: “Milost will continue to do business in Nigeria despite any negative publicity and this will ultimately benefit Nigeria and Africa. Milost Global Inc. has analysed all its facts on the table and decided to terminate the Unity Bank transaction and the termination letter was sent to the bank this morning.
“Milost Global Inc., wishes to reaffirm its interest in the Nigerian market and to also state that it will soon be releasing the first and second drawdowns to Japaul Oil & Maritime Services PLC to the total of $21 million in a combo of equity and debt. “Another first and second draw down proceeds of $10 will be released to Resort Savings & Loans Plc the funds will be released to both company within the month of April.”
