Talks With Milost Were Still At Preliminary Stage, Says Unity Bank

The management of Unity Bank Plc said the botched discussions with Milost Incorporated were still at preliminary stage and subject to relevant regulatory, statutory and corporate governance compliance parameters.
In a statement to the Nigerian Stock Exchange (NSE), which was reiterated when the management visited the bourse on Thursday morning, the bank faulted insinuations by the U.S-based investment group that the talks had reached the level of a “binding commitment agreement.”
Without such binding agreement, by Mohammed Shehu, its company secretary, the management said the issue of “termination” of such “transaction” by the intended investor could not therefore have arisen.
The statement rather alluded to a document prepared by Milost containing “the suggested terms and conditions on which Milost was planning to consider its possible participation in the capital funding.
The statement assured that the bank is fully aware of the steps required for any investment proposition and the need to carry stakeholders, particularly the regulators and shareholders along at every stage of the process.
“As stated in our previous correspondence, the bank through the mandate of its Board and shareholders has been involved in series of preliminary engagements with several prospective investors including Milost, but the bank did not execute a binding definitive agreement with Milost Global Inc.
“It is therefore a misnomer for anyone to claim that the bank issued a false statement relative to the nature of the communication between Milost and the bank.
“The nomenclature “Commitment Letter” was apparently adopted by Milost in its communication to buttress its seriousness to proceed with the transactions subject to relevant compliance requirements.”
The bank recalled that the decision to seek fresh capital injection followed advise by various regulators, following which shareholders duly approved the series of discussions and engagements with prospective “value-plus investors,” guided by extant regulations on capital raising, just as the process was made transparent.
It said Milost Global, being one of the prospective investors introduced by a local entity called Mayo BV, and that there is nothing unusual about such expression of interests involving some level of preliminary discussions and exchange of nonbinding “documentary communications between the intending parties towards establishing mutual foundation on which the transaction contemplated will be initiated.”
The “Term Sheet” dated September 4,2017 said to have been executed, the bank continues, was only a “proposal” submitted by the investor “for discussion purposes only rather than “a commitment” by the parties and that no definitive documentation governing the proposed financing was executed.