SCIL To Pay N1.3trn In 25yrs After Purchasing Polaris Bank

SCIL To Pay N1.3trn In 25yrs After Purchasing Polaris Bank

Strategic Capital Investment Limited (SCIL) has been obliged to refund the N1.3 trillion injected into Polaris Bank in the next five years.

In a statement in which the Central Bank of Nigeria (CBN) disclosed SCIL as the preferred bidder for the purchase of Polaris Bank, it was revealed that the fund was used to recapitalise the financial institution.

The sale decision was jointly taken with the Asset Management Corporation of Nigeria (AMCON), the government’s bad debt buyer, which took over Skye Bank after the CBN withdrew its licence in 2018 before setting up Polaris as a bridge bank.

The new owner, SCIL, has completed a Share Purchase Agreement (SPA) for the acquisition of 100% of the equity in Polaris Bank, according to a statement by the spokesperson of the CBN, Osita Nwanisobi. It paid N50 billion and has agreed to refund N1.3 trillion injected into the bank.

“As part of the CBN intervention, consideration bonds with a face value of N898 billion (future value of N1.305 trillion) were 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’ funds, prevent job losses and preserve systemic financial stability,” the statement said.

“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 statement added that the sale was coordinated by a divestment committee comprising representatives of the CBN and AMCON, and advised by legal and financial consultants.

“In the process, parties who had formally expressed an interest in acquiring Polaris Bank, subsequent to the CBN intervention in 2018, were invited to submit financial and technical proposals. Invitations to submit proposals were sent to 25 pre-qualified interested parties, out of which three parties eventually submitted final purchase proposals following technical evaluation,” it read.

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