The Asset Management Corporation of Nigeria on Thursday announced Heritage Bank-sponsored HBSL Investment Services Limited as the preferred bidder for Enterprise Bank.

This came over a year after AMCON began the sale process of the nationalised bank. The PUNCH had on Thursday exclusively reported that Skye Bank, Fidelity Bank and Heritage Bank were in keen contest to buy the bank.

Enterprise Bank is one of the three nationalised banks created after the 2009 banking crisis, which saw the nationalisation of Afribank Plc, Bank PHB Plc and Spring Bank Plc.

The three bridge banks created from the failed banks are Enterprise Bank, Mainstreet Bank and Keystone Bank.

A statement by AMCON confirming the result said Heritage Bank emerged the preferred bidder, while Fidelity Bank was the reserve bidder.

The statement signed by the Head, Corporate Communications, Mr. Kayode Lambo, said, “The Asset Management Corporation of Nigeria is pleased to announce HBCL Investment Services Limited as preferred bidder and Fidelity Bank Plc as reserve bidder for the acquisition of the entire issued and fully paid up ordinary shares of Enterprise Bank Limited. This follows the receipt of the approval of the Board of Directors of AMCON. HISL is sponsored by Heritage Banking Company Limited.”

Lambo said in the event that Heritage Bank was unable to meet the share purchase agreement, Fidelity Bank would become the preferred bidder.

He said, “The completion of the transaction is subject to the fulfilment of the conditions precedent as stated in the Share Purchase Agreement that is to be executed between AMCON and HISL. In the event that HISL is unable to complete the transaction in line with the payment terms and other provisions of the SPA, the SPA entered into with HISL would be terminated and Fidelity Bank would become the preferred bidder.

“This process started with interest shown by 24 parties cutting across local and international bidders. The emergence of HISL and Fidelity Bank as the preferred and reserve bidders, respectively resulted from a rigorous and competitive bidding process, which was coordinated for AMCON by Citigroup Global Markets Limited and Vetiva Capital Management Limited (financial advisers) and G. Elias & Co. (legal advisers).”

AMCON is due to announce the preferred bidder for Mainstreet Bank on, or before October 31.

The Managing Director, AMCON, Mr. Mustafa Chike-Obi, said Keystone Bank sale would commence later.

Enterprise Bank commenced operation in August, 2011 as a full-service commercial bank with a national banking licence. The bank operates via a sizeable distribution network of over 160 branches spread across major markets and commercial centres in Nigeria and with over 177 Automated Teller Machines, 57 cash centres and 2,000 Pint of Sale terminals.

The Central Bank of Nigeria had on August 5, 2011 revoked the operating licences of Afribank, Spring Bank and Bank PHB, which it said did not show enough capacity and ability for recapitalisation.

In their place, the CBN, through the Nigerian Deposit Insurance Corporation, established three bridge banks and transferred the assets and liabilities of the affected banks to the bridge banks.

Mainstreet Bank took over the assets and liabilities of Afribank; Keystone Bank assumed the assets and liabilities of Bank PHB; while Enterprise Bank took over Spring Bank.

Consequently, AMCON acquired from the NDIC the three bridge banks and injected N679bn into them to meet the minimum capital base of N25bn and the minimum capital adequacy ratio of 15 per cent.

Mainstreet Bank received N285bn; Keystone Bank, N283bn; and Enterprise Bank, N111bn.

Heritage Banking Company Limited, often referred to as Heritage Bank, is a commercial bank in Nigeria. It is one of the commercial banks licensed by the Central Bank of Nigeria, the country’s banking regulator.

In 2012, the core investor, IEI Plc, through IEI Investments Limited, acquired the Societe Generale Bank of Nigeria licence from the Central Bank of Nigeria.

Having fulfilled all required criteria, the bank returned 100 per cent of existing SGBN account holders’ money to their owners. HBCL is a large financial services provider in Nigeria. Currently licensed as a regional bank, it offers banking and financial services in the country, excluding the South, Southeast and the North.[

As of March 2013, the total asset valuation of the bank was estimated at about $192m (N31bn).

Punch

Heritage to Acquire Enterprise Bank for N56bn, Fidelity is Reserve Bidder


• AMCON to divest from more banks next month, records N637bn loss
Obinna Chima

After a fierce contest spanning over several months for the acquisition of Enterprise Bank Limited, Heritage Bank Limited yesterday emerged the preferred bidder for the commercial bank that is wholly owned by the Asset Management Corporation of Nigeria (AMCON), THISDAY learnt last night.

However, a reliable source at AMCON who revealed this on the condition of anonymity said Fidelity Bank Plc emerged as the reserve bidder for Enterprise Bank.

The source put the winning bid submitted by Heritage Bank for the acquisition of Enterprise Bank at N56 billion.

He also revealed that under the terms of the Share Purchase Agreement (SPA), which would be signed on September 19, 2014 between AMCON and Heritage Bank, the bank would be expected to pay 20 per cent or N11.2 billion of the bid price for Enterprise Bank 48 hours (September 21) after the execution of the agreement.

The balance of 80 per cent or N44.8 billion would be paid by October 13, he said.
Should Heritage Bank fail to meet the payment terms, Fidelity Bank will take its place as the preferred bidder.

Heritage Bank commenced operations in March 2013. The deposit money bank was formed from the defunct Societe Generale Bank of Nigeria (SGBN) and was granted a regional banking licence by the Central Bank of Nigeria (CBN).

On commencement of business, its shareholding structure was 80 per cent core investor, nine per cent legacy bank, and 11 per cent of depositors’ funds.
The bank has continued to portray itself as an SME-focused financial institution.
Confirming Heritage’s emergence as the preferred bidder, AMCON in a statement last night by its Head of Corporate Communication, Kayode Lambo, said: “The completion of the transaction is subject to the fulfillment of the conditions precedent as stated in the Share Purchase Agreement (SPA) that is to be executed between AMCON and HISL (the investment vehicle owned by Heritage Bank).

“In the event that HISL is unable to complete the transaction in line with the payment terms and other provisions of the SPA, the SPA entered into with HISL would be terminated and Fidelity Bank would become the preferred bidder.”
AMCON said the process for the sale of Enterprise Bank started with interest shown by 24 parties cutting across local and international bidders.

“The emergence of HISL and Fidelity Bank as preferred and reserve bidders respectively resulted from a rigorous and competitive bidding process, which was coordinated for AMCON by Citigroup Global Markets Limited and Vetiva Capital Management Limited (Financial Advisers) and G. Elias & Co. (Legal Advisers),” AMCON said.

In a related issue, following its successful divestment from Ecobank Transnational Incorporated (ETI), with the sale of its 12.5 per cent minority stake in the bank to Doha-based Qatar National Bank (QNB), AMCON yesterday disclosed plans to divest from more banks and quoted companies before the end of next month.
The Executive Director, Finance and Operations, AMCON, Mrs. Mofoluke Dosunmu, said this while commenting on the corporation’s 2013 financial results made available to THISDAY yesterday.

The results, the corporation’s third full operational year since it undertook its mandate to stimulate the recovery of the Nigerian financial system, showed that AMCON once more recorded a total comprehensive loss of N636.79 billion in the year under review.
Also, while AMCON’s total assets stood at N1.75 trillion, its total liabilities in the year under review stood at N5.21 trillion. AMCON’s net fee and commission income in the period under review was N1.27 billion.

Shedding light on the loss recorded by the corporation, Dosunmu explained: “If you look at the track record of resolution vehicles across the world, the turnaround time is around 10 to 15 years and so it will take some time for AMCON to start making profits.”

Responding to a question on the likely impact of the ongoing sale of Enterprise Bank Limited and other assets on AMCON’s balance sheet, the executive director said: “When you sell an asset, it doesn’t go into profit. The only time it would have gone into profit is if you made a margin on the sales and I am sure you know how much we put into those banks to bring them back to profitability.

“However, there would be cash flow from the sale that would help us in the bond repayment.”

According to AMCON’s financial statement that was prepared in accordance with International Financial Reporting Standards (IFRS), AMCON’s bonds of N4.5 trillion face value were redeemed in December. The bonds were partly refinanced by a loan of N3.8 trillion from CBN.

AMCON is expected to redeem the third tranche of its bonds held by private investors valued at N866.73 billion by next month.
After the redemption next month, the CBN would be the only bondholder in AMCON.

The corporation’s bonds held by banks and other private investors, which amounted to N734.09 billion, were redeemed on December 31, 2013, in line with the terms of the indenture, while bonds of N3.51 trillion held by the CBN, were restructured into a N3.80 trillion note at six per cent, with a 10-year tenor.

The Eligible Bank Assets (EBAs) acquired by AMCON also stood at N2.37 trillion as at the end of December 2013, down from N2.72 trillion at the end of June 2013.
Also, restructured loans amounted to N374.35 billion as at December 31 last year, of which 55.75 per cent were performing, while 44.25 per cent were non-performing.

Similarly, total recoveries at the end of December last year were N164.5 billion.

ThisDay

OK

It is a good one for Heritage Bank considering their current branch network. They should now upgrade their license to National Banking...