March 23, 2011
The Board of Directors of Union Bank of Nigeria plc has signed a memorandum of Agreement (the MoA) with the African Capital Alliance Consortium (ACA Consortium) to invest $750 million in the bank. This is sequel to the earlier announcement that the bank had entered into negotiation with a core investor. “The MoA will, in the main, provide a framework for the process by which the bank will be recapitalised,” Union Bank said in a statement made available to BusinessDay.
The bank said the entire process will be subject to the approval of the bank’s shareholders, the Central Bank of Nigeria (CBN), the Securities and Exchange Commission (SEC), The Nigerian Stock Exchange (NSE) and the Federal High Court.
According to Union Bank, recapitalisation by the ACA Consortium will enhance its liquidity, corporate governance and capital adequacy, as well as restore its strong competitive position.
The ACA Consortium is a group of institutional investors led by African Capital Alliance (ACA), a leading independent private equity firm investing in West Africa, principally in Nigeria and the Gulf of Guinea.
Historically, the ACA Consortium was founded in 1997 with a mission to build Africa’s premier private equity and private investment firm by mobilising capital, technology and management resources from local and international sources to unlock Africa’s private sector potential.
The ACA Consortium, which will invest as Union Global Partners Limited, consists of ACA B-Holding Limited, (comprising an ACA Managed fund, FMO Netherlands, an international development financial institution and other co-investors), TRG Management LLP, The Keffi GroupVIII LLC ( comprising the Keffi group and other United States based institutional investors), ABC Holdings Limited (Bank of Botswana), and the Discovery Group.