By Yemi Kolapo

Following the almost concluded merger and acquisition deals between the rescued banks and core investors, a formula for establishing the percentage ownership of all the parties to the recapitalisation deals may be approved on Thursday.

Investigation by our correspondent revealed that the ownership structure would be determined by weighing a bank’s total non-performing loans against the total amount it required to recapitalise to zero level.

According to findings, the formula will also give the existing shareholders of rescued banks some value to fall back on unlike if the banks were to be liquidated.

A source close to the deals told our correspondent that the formula, which had been endorsed by the Central Bank of Nigeria and the Ministry of Finance, might be approved at the Asset Management Corporation’s board meeting scheduled to hold on Thursday.

“We have seen what the ownership formula looks like. I think everyone has a good deal, based on the level of negative capital of the banks and their non-performing loans,” the source, who spoke in confidence to our correspondent because of the delicate nature of the matter, said.

Our correspondent reliably gathered that, for existing shareholders, their percentage ownership would be determined by dividing the value of a bank’s non-performing loans by the total amount required to recapitalise it to zero level.

The percentage ownership of AMCON in all the cases, it was learnt, would also be arrived at by dividing the value of recapitalisation (difference between NPL value and total requirement) by the total capital requirement.

A source close to the Oceanic Bank International Plc’s recapitalisation deal disclosed to our correspondent that, on the basis of the ownership formula, the new investors might own 80 per cent of the bank, while AMCON and the existing shareholders might end up with 10 per cent each.

The source, who asked not to be named because he was not authorised to speak on the matter, said it was a fair deal that provided something for existing shareholders, who would have had nothing as a result of the amount of negative capital the bank had.

Our correspondent also found that in the case of Wema Bank Plc, AMCON might not own any shares because the bank would need no additional capital after selling about N17bn NPLs to the corporation.

For Intercontinental Bank Plc, investigation revealed that Access Bank Plc had almost concluded plans to inject about N60bn into the bank. It was gathered that the fund, when injected, would raise Intercontinental Bank’s capital adequacy ratio to about 15 per cent. This is after AMCON must have recapitalised it to zero level. The same, according to experts, is expected of other banks’ recapitalisation deals.

However, findings showed that Intercontinental Bank might operate as an independent entity for up to 18 months, until all arrangements were finalised.

When contacted, the Managing Director, AMCON, Mr. Mustafa Chike-Obi, said, “Of course, there will be a formula for determining the percentage ownership of the parties involved in the recapitalisation of banks and that is being worked on. However, I can’t say that a particular formula has been prepared now. Once it is approved, it will be made known.”

The Head, Corporate Affairs, CBN, Mr. Muhammed Abdullahi, said he was not aware of an ownership formula for now, but added that “the banks and their financial advisers should know about that.”

Source: Punch