September 27, 2011 3964 VIEWS

Monday, 26 Sep 2011    




As the remaining five rescued Deposit Money Banks begin their Extraordinary General Meetings from today, there are indications that the merger and core investor proposals by the banks will be approved by the shareholders. ADEMOLA ALAWIYE and OKECHUKWU NNODIM report.


With four days left to the September 30 deadline set by the Central Bank of Nigeria for the recapitalisation of the remaining five rescued Deposit Money Banks, some industry analysts have expressed confidence that the banks will meet the apex bank’s Friday deadline.


The banks, in the last one month, have been working hard to make all the stakeholders to unanimously endorse the Transaction Implementation Agreements signed by them with core investors.


According to the analysts, this stage, which is the last lap in the recapitalisation process, can make or mar the whole process.


They, however, believed that with the nationalisation of three banks last month, the shareholders would see the approval of the TIAs as a better option.


The banks, in a bid not to be caught unawares, have, however, met with various shareholder groups to endorse the implementation agreements.


Information available to our correspondents on Friday showed that majority of the shareholders had agreed to support the deals.


Our correspondent also gathered that 25 shareholder groups out of 30 had agreed to approve the TIAs.


However, the experts said the number of groups might not matter as the shares held by each individual would be considered.


Ecobank Transnational Incorporated, a pan-African bank and the parent company of Ecobank Nigeria Plc, had on September 12 announced its preparedness to buy 100 per cent share capital of Oceanic Bank International Plc.


A source in Oceanic Bank had told one of our correspondents that ETI would pay N38.5bn worth of its ordinary shares and N156.5bn in preference shares for total control of the rescued lender.


“ETI will own 100 per cent of the share capital of Oceanic Bank, while existing shareholders of Oceanic Bank and the Asset Management Corporation of Nigeria will become shareholders in ETI pursuant to the scheme. It is further envisaged that subsequent to this, ETI will merge Oceanic Bank with Ecobank Nigeria Plc,” Oceanic Bank said in a statement.


Oceanic Bank and ETI subsequently signed a merger agreement in July, paving the way for the former to be recapitalised, in what investors hope will end the Oceanic Bank’s crisis.


Also, early this month, Access Bank Plc said it would seek shareholders approval to acquire 75 per cent stake in Intercontinental Bank Plc and use N53bn it had raised in 2007 to fund the transaction.


So far, majority of the shareholders of Intercontinental Bank have expressed optimism that the EGM will pave way for the bank’s recapitalisation, as they dispel fears of possible collapse of agreements.


The President, Association for the Advancement of the Rights of Nigeria Shareholders Dr. Farouk Umar, said successful implementation and endorsement of the agreements by shareholders would be highly beneficial to the banks and to the investors.


He said, “With the way Access Bank has been well managed by a highly skilled board and management, we are confident that the future will be very bright for us. Also, because we are shareholders of First City Monument Bank Plc, the bank’s investment in FinBank Plc will certainly benefit us.”


Intercontinental Bank had last week urged its shareholders to vote in favour of the deal with Access Bank.


FCMB had in July signed merger agreements with FinBank. The bank had early this month said it would seek shareholders approval to acquire FinBank without releasing the financial details of the proposed deal with the rescued lender.


In May, the merger between FinBank and FCMB was halted by a Federal High Court sitting in Lagos, but issues were later resolved after intervention by the healthy lender and the CBN.


However, stakeholders still expressed hope that the recapitalisation of FinBank by FCMB would go hitch-free.


Some stakeholders, who spoke with our correspondents at separate interviews, noted that the EGMs aimed at deliberating on issues pertaining to the recapitalisation of the affected DMBs would to a large extent, decide the future of the banks.


The President, Nigeria Constance Shareholders Association, Mr. Shehu Mikail, said shareholders who were not in support of the recapitalisation exercise were in the minority, adding that there were indications that the aggrieved investors would support the mergers and acquisition.


He said, “Some of these minority shareholders are beginning to associate with the rescued banks and they are no more calling for court cases. I believe that since most shareholders are in favour of recapitalisation, the EGMs will hold smoothly according to plan.”


Ahead of its meeting, Union Bank of Nigeria Plc has released its post recapitalisation scheme document, allotting 79 per cent shareholding to AMCON and the core investor.


The bank revealed that AMCON would hold 19 per cent of the total shareholding while the core investor, Union Global Partner, would hold 60 per cent of its total shareholding.


“After recapitalisation, the new investors will have 60 per cent, AMCON will have 19 per cent and existing shareholders will hold 21 per cent,” the bank said.


Prior to this period, Union Bank had faced different issues with its stakeholders, from its pensioners who hold a significant number of stake in the bank to workers. Experts believed that the current negotiations by the bank’s management with the aggrieved stakeholders would go a long way in helping the bank to achieve its recapitalisation plan.


In the same vein, Sterling Bank Plc has said it will transfer 20 per cent of its shareholdings to AMCON and shareholders of Equitorial Trust Bank after the conclusion of the merger transactions.


The bank also said it would issue three billion new shares to accommodate the shareholders of ETB and AMCON.


Analysts strongly believed that the ETB acquisition was likely to be the easiest as the board and management had already approved the TIA in principle.


They also said that the deal had won the backing of the ETB board and Chief Mike Adenuga.


Source: The PUNCH/ By Ademola Alawiye and Okechukwu Nnodim    

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