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AMCON to fully divest from Mainstreet, Enterprise Banks on September 15

By BusinessNews Staff on June 9, 2014

A strong indication emerged last week that barring any unforeseen development, the Federal Government through the Asset Management Corporation of Nigeria (AMCON) will be handing over two of the three bridged banks, namely Mainstreet Bank Limited and Enterprise Bank Limited to their new owners on September 15.
The corporation, in its bid to smoothen the process, had appointed Barclays Africa Group Limited and Afrinvest as financial advisers for the divestment of its shareholding in Mainstreet Bank Limited, while Banwo and Ighodalo were appointed as legal advisers on the divestment.
For the sale of Enterprise Bank, Citigroup Global Markets Limited and Vetiva Capital Management Limited were picked as the financial and legal advisers.
AMCON is expected to commence the sale of the third bridged bank, Keystone Bank, immediately the first two are handed over to their new owners.
However, as anxiety over the fate of the bridged banks rises, the Managing Director, AMCON, Mr. Mustafa Chike-Obi, told THISDAY last week that the privatisation process for Enterprise Bank and Mainstreet Bank was in progress, disclosing that the two banks will be handed over to their new owners by September 15.
He said: “We will complete the divestment from Enterprise Bank and Mainstreet Bank by September 15 of this year. Those divestments are necessary for us.”
Reacting to the insinuations from certain quarters that the corporation appeared to be in a hurry to sell the banks, especially Mainstreet Bank, Chike-Obi said he had made it clear from the onset that AMCON will exit the banks as soon as possible.
“I like it when people say we are in a hurry to divest from these banks. From the minute those banks were bridged, I have been saying it repeatedly that we would divest from those banks as soon as practicable. Left to me, we would have done so sooner than now, but it is also very amusing and mischievous when people take out a section of a process that is seven months plus, and complain that that is just only nine days and it is too short.”
Reacting to the initial criticism of the timeline for the expression of interest in Mainstreet Bank, Chike-Obi explained: “The process of divesting from Mainstreet Bank started in February by the selection of the advisers and several other steps. After the selection of advisers, we did Expression of Interest; we did a shortlist and later we invited people over for more detailed discussions; then due diligence; then a binding offer and the offer is narrowed to two to three names that were sent to the CBN.
“The whole process takes about six to seven months. Everybody said it is being rushed and I think getting investors into any bank in seven months is plenty of time. We will be done by September 15, we will do it transparently and properly, we will get the best combination of price, income and the best managers that will build the banks in the future.”
AMCON had put Enterprise Bank up for sale last year and had attracted 18 bidders including foreign and local investors, while the same process is on-going for Mainstreet Bank.
Mainstreet Bank as at December 31, 2013, had nine subsidiaries; and a distribution network made up of 201 branches, nine cash centres and 200 automated teller machines.
Based on the consolidated management accounts of the group as at December 2013, total assets were N330.2 billion and customer deposits were N155.8 billion.
AMCON had in recent advertorial invited interested buyers (eligible entities or consortia) to indicate their interest by submitting an Expression of Interest (EOI). Prospective buyers were required to submit their EOIs in English and titled “Expression of Interest for the Acquisition of Mainstreet Bank Limited.
According to AMCON, upon the receipt and evaluation of the EOI, a shortlist of buyers, who in its view are deemed to be fit and suitable from a regulatory perspective (amongst other things), would be prepared and would proceed to the first phase of the transaction.
The September 15 handing over date was reinforced with the recent submission of part of the reports on the process to AMCON.
The Head, Corporate Communications, AMCON, Mr. Kayode Lambo, had in a recent interview said the corporation would make decisions on the banks as soon as it got the complete reports.
“They financial advisers have submitted their reports but the reports are incomplete; there is one or two things that they need to add. Once that is done, decisions will be taken on the way forward for the banks,” he said.
Industry watchers, however, see the September 15 target set by the corporation as an indication that the financial advisers might have submitted their full reports