By Gbenga Agbana with agency reports

Friday, 10 Dec 2010

Afribank Nigeria Plc, one of nine lenders rescued in a $4bn bail-out last year, said on Thursday that it was in talks with potential investors about recapitalisation, but gave no further details.

Reuters quoted the bank as saying, ”The bank has entered into exclusive negotiations with a potential core investor group, which if successful, could lead to the recapitalisation of the bank.”

Banking sources said last month that Afribank was considering a bid by local rival Fidelity Bank. Fidelity Bank had also in the past confirmed that it had bid for a rescued bank, but made no further comment, Reuters reported on Thursday.

When contacted, an official of the bank told our correspondent that the management had notified the NSE about the development, but did not give details of the transaction.

The CBN Governor, Mr. Lamido Sanusi, had said foreign private equity investors and banks were among those interested in the rescued banks but had not given details.

A source, according to Reuters, had said, ”Afribank Plc, Finbank Plc, Oceanic Bank International Plc and Intercontinental Bank Plc are in talks with healthy local rivals about recapitalisation.

“Afribank is considering a bid by Fidelity Bank Plc. Oceanic Bank and Intercontinental Bank, among the biggest of the rescued banks, are also in talks with local competitors, but these are at an early stage.

”Spring Bank Plc and Equitorial Trust Bank Limited, among the smallest of the distressed banks, were yet to find suitors, while Wema Bank Plc, is restructuring into a regional bank. It raised N9bn in a share placement in September and has won approval to raise N7.5bn more to ensure its survival,” the report added.

The CBN rescued nine banks deemed to be dangerously undercapitalised in a $4bn bail-out last year. The CBN had been trying to find new investors to help recapitalise them since then.

Source: Punch