The board of primary mortgage bank- Resort Savings & Loans Plc says discussions with Milost Global Incorporated, a New York equity investment firm, has reached an advance stage so far, despite the hiccups it suffered some months ago arising from negative press.
In a statement to the Nigerian Stock Exchange (NSE) dated September 17, 2018, by Benedicta Ovoke Sadare of S.E. Nomuoja & Co, the company secretaries, Resort Savings said it “had executed binding agreement and first drawdown agreement of $10m with provision for immediate release of $1m.”
Disbursement of the fund, it said is being delayed by valuation of its shares through market forces, adding that Milost has assured that the funds already escrowed will be released as agreed in the Term Sheet.
The company’s shares are presently on technical suspension, adding that to ensure quick resolution of all pending issues raised by various regulators, BBC Professionals are currently auditing the backlog of financial statement for 2015, 2016 and 2017.
While the 2015 financials have been approved by the CBN and presented to the NSE; others “will be transmitted without delay as soon as they are approved,” the statement assured.
Also, as part of the recapitalization process, the statement assured that professional parties to the issue will be appointed; just an escrow agent agreement with each of Milost Global and Mr. Kunle Adegbite.
The audited accounts will then be forwarded to the Central Bank of Nigeria (CBN), for approval, before being transmitted to the regulators, stakeholders and then the public.
Resort restated the boards belief in its brighter future.
A joint statement by Milost and directors of the three companies, all listed on the NSE had noted at the time that the capital injection was part of helping to save the beneficiary companies from going under.
The statement by Mandla J. Gawdiso, who designed the Milost Equity Subscription Agreement (MESA), a global investment instrument, a combination of debt and equity facility, said Milost quoted Kim Freeman, chief executive of Milost as saying the company “wants to be instrumental in sustaining this growth. Our MESA fund is an innovative facility that allows a company to not only reach its true market value but also to achieve its vision of a larger more vertically diversified company through acquisitions and organic growth.”
Unity Bank, had at the time denied media reports of the $1bn private equity injection from Milost and urged “the public to disregard any information to the contrary,” even as talks continued with a number of potential investors yet to reach the point for a commitment of an investment.
Recall that Milost was originally reported as planning to invest in Resort Savings, United Bank Plc and Japaul Oil Services, with United Bank billed in talks for a $1bn capital injection, which many questioned as amounting to an outright buyout of the existing shareholders.
Bloomberg had reported at the time that 25% of the the $ibn investment concluded with Milost Global in the bank, was for an immediate 30% equity stake, while the remaining $750m will then be injected over a four-year period as a blend of equity and convertible bonds.