24th June, 2011
Barely three months to the 30 September deadline set by the Central Bank of Nigeria, CBN, for the eight banks that failed in 2009 to recapitalise to zero level or be liquidated, Union Bank Plc is shopping for at least N282 billion to stay afloat, the Group Managing Director of the bank, Mrs. Funke Osibodu, has disclosed.
At an interactive session yesterday with journalists, Osibodu disclosed that to beat the CBN deadline, Union Bank must wipe out its negative balance sheet which stands at about N182 billion at the moment. She said the bank must also raise at least N100 billion from its core investors.
Osibodu, however, assured that mechanisms have been put in place to beat the deadline.
â€œUnion Bank will be around well after 30 September,â€ she said.
She said that the bank will soon sign a Transaction Implementation Agreement, TIA, with its core investors, led by the Africa Capital Alliance, ACA.
â€œWe had already signed our memorandum of agreement with a group of private equity investors led by the Africa Capital Alliance, ACA. We are now at the tail end of the Transaction Implementation Agreement with our core investors. With that agreement, then we have an investor.
â€œWith the TIA, a complete agreement will be submitted to two key parties; the regulators (the Central Bank of Nigeria and the Securities and Exchange Commission) and the shareholders,â€ she said.
Osibodu disclosed that core investors are investing $750 million (about N112 billion) while AMCON will wipe out the negative balance sheet.
â€œWe expect all of that to be concluded within the month of August. We are expecting funds from the three partners; AMCON which will make sure that the capital of the bank gets to zero level, core investors led and the shareholders. That process will be presented to the shareholders for approval, and once itâ€™s approved, the three partners will bring in money in September,â€ she said.