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Recapitalisation: Afribank signs MoU with private equity group

By on April 6, 2011

The Board of Directors of Afribank Nigeria Plc has signed a Memorandum of Understanding with Vine Capital Partners Limited and Phoenix Acquisition Company Limited in a bid to recapitalise the bank.

According to a statement by the bank on Tuesday, the MoU provides a framework for the process by which the bank will be recapitalised.

The statement said, “Afribank is pleased to announce that the bank had entered into negotiations with a potential core investor. The board of directors of the bank has signed an MoU with a potential core investor, Vine Capital Partners Limited and Phoenix Acquisition Company Limited.”

The statement added, “Vine Capital Partners is an emerging markets private equity firm with an interest in banking and financial services in Sub-Saharan Africa. The Vine Capital Consortium is made up of local and international firms.”

The statement also noted that the process would be subject to the approval of the bank’s shareholders, the Central Bank of Nigeria, the Securities and Exchange Commission, the Nigerian Stock Exchange and the Federal High Court.

The CBN Governor, Mr. Lamido Sanusi, had said that three of the rescued banks would announce new investors in their recapitalisation deals soon.

Sanusi had said, “In the next four weeks, we expect three of them to sign MoUs with their new investors. Two of the banks are expected to conclude negotiations in the next two weeks.”

The board of directors of Union Bank of Nigeria Plc recently signed an MoU with the African Capital Alliance Consortium to invest $750m in the bank.

The CBN had said that it intended to complete the process of recapitalising the rescued banks that failed the audit test by the middle of the year.

Sanusi said, “The CBN aims to complete the process of recapitalising the eight commercial banks it rescued from collapse in 2009 by the middle of the year.”

Source : Punch