The Nigerian Stock Exchange (NSE), says it has invited the management of Unity Bank Plc to address concerns over the recent news about the purported $1bn investment by Milost Global Inc. a New York-based private equity firm.
A notice by the NSE said the Unity Bank executives would “address the market today, Thursday, 29 March 2018 at 11.30 a.m.”
Milost reportedly terminated the $1bn equity and debt deal meant to grant it 60 per cent stake in Unity Bank Plc, in what it said followed analysis of all its facts about the deal, and decided to terminate it.
It said a letter terminating the transaction was sent to Unity Bank, even as the firm reaffirmed its interest in the Nigerian market.
Unity Bank Plc had, last week dismissed reports that Milost Global Inc. planned to invest $1 billion in the bank.
In a statement, the bank stated that it has not reached any agreement with Milost to warrant such a speculations. The statement, signed by the bank’s Head, Corporate Communications, Matthew Obiazikwor, said: “We categorically dismiss media claims of any such deal and advise the public to disregard any information to the contrary.”
“The bank hereby makes further clarifications regarding its on-going recapitalization programmes to the effect that Unity Bank has not received commitment for investment of $1 billion from Milost. Unity Bank is in talks with a number of potential investors and has not concluded to pave the way for commitment of an investment,” he said.
But Milost Global Inc gave more details of the transaction. It disclosed that on August 7, 2017 it had received a request for a call with the Chief Executive Officer (CEO) and Chief Finance Officer of Unity Bank Plc.
“On the call, Unity Bank expressed its interest in working with Milost Global Inc. as its funding partner for its growth plans in Nigeria. Following the call, a desk top due diligence was conducted by Milost to its satisfaction. On September 4, 2017 a $1 billion financing term sheet was fully executed by both Milost and Unity Bank. The facility, a combo of equity and debt, was provided on the exciting understanding that Unity Bank would delist on the Nigerian Stock Exchange and move its listing to the USA. The signed term sheet was approved by the board of Unity Bank,” the firm explained.
Continuing, it said that On Monday October 23, 2017, Milost Global Inc. was visited by Mrs. Oluwatomi Somefun, the CEO of Unity Bank Plc, at its New York offices.
The meeting which went ahead as planned was attended by Milost Global Inc. analysts and the Chairman, Egerton Forster. At the meeting she explained the need for capital funding at the bank and also their expansion plans.
It was then agreed that Milost Global Inc. would start further due diligence on Unity Bank Plc. Further due diligence process started on the same week on the instruction of the Chairman of Milost Global Inc., Egerton Forster. The statement stated that further due diligence was satisfactory and Milost issued a binding commitment agreement to Unity Bank, which was approved by the board of Unity Bank and executed by both parties on November 14, 2017.
“It is normal practice for all the publicly quoted companies which we fund to notify the market regulator on signature of the commitment letter since it has material effect to the stock; however Unity Bank did not. Milost assumed that this did not happen because Unity had agreed to move its listing to the United States of America.”