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AMCON Acquires Bridge Banks Press Statement

Category: Money Market

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AMCON Acquires Bridge Banks  Press Statement



Lagos, August 06, 2011
Press Statement
Asset Management Company of Nigeria ("AMCON") TO ACQUIRE BRIDGE BANKS
Following the announcement, yesterday August 5, 2011, of the establishment of three Bridge Banks, namely; Mainstreet Bank Limited, Keystone Bank Limited and Enterprise Bank Limited, the Nigeria Deposit Insurance Corporation (“NDIC”) and the Asset Management Corporation of Nigeria ("AMCON") after intensive negotiations through the night, are pleased to announce that they have signed an agreement today, August 6, 2011, for AMCON to acquire the three Bridge Banks.
The acquisition and transfer of ownership has been effected through a subscription agreement with each of the three banks. By the subscription agreement, AMCON will become the owner of the three banks, and will provide sufficient capital to restore the banks to the level of capital adequacy stipulated for their operations.
The capital provided by AMCON through shares subscription will strengthen the banks' liquidity to enable them carry on business and meet all their obligations as they fall due. Consequently, the banks are in a position to repay the loans obtained from the Central Bank of Nigeria (CBN). The liquidity position of the banks is further enhanced by the willingness of the CBN to extend the guarantee of their interbank obligations until December 31 2011.
AMCON has identified independent and credible persons with significant and required experience to fill the board and senior management positions for the banks and will be seeking the approval of the CBN for their appointments. AMCON is confident that the new teams will manage the banks to establish strong market positions and effectively compete in the Nigerian banking sector, providing quality service to their customers and value to shareholders.
AMCON will continue to evaluate its strategic options and consider the optimal and timely exit strategy that maximizes its returns.
AMCON expects that the action it has taken today, in fulfillment of its role as a resolution vehicle, pursuant to the provisions of the AMCON Act 2010, will further reinforce confidence and stability in the banking system, and bring an end to the crisis in the Nigerian banking system.

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