By InvestAdvocate

Lagos (INVESTADVOCATE)-Shareholders of First City Monument Bank Plc (FCMB), Thursday approved the Acquisition and Merger deal with Finbank Plc (FinBank) at an Extra Ordinary General Meeting (EGM) held in Lagos Nigeria.

This is coming on the heels of the September 30 2011 deadline by the Central Bank of Nigeria (CBN) that all rescued Money deposit Banks should recapitalised of be nationalised.

This development has paved the way for further negotiations for 100 percent (100%) Acquisition and Merger deal between the two Banks.

At the EGM, 99.97% of shareholders present voted for the FCMB’s resolution to acquire Finbank through its wholly owned investment subsidiary, FCMB Investments Limited (FIL).

A joint letter from the Chairmen of the Boards of Directors (BOD) of both Banks highlighted the Scheme of Arrangement between the two which reads thus:

“The Scheme of Arrangement for the acquisition of Finbank provides for the reorganisation of Finbank’s entire share capital by the reduction and cancellation of the entire issued share capital and corresponding of the authorised share capital of Finbank.

The AMCON shall then restore Finbanks’ current negative shareholder fund to zero. FCMB through a special purpose vehicle FIL will then acquire the scheme shares from AMCON” the Arrangement reads

Also, shareholders ratified the Bank’s loan agreement over loan transaction and convertible loan transaction amounting to $70 million from International Finance Corporation (IFC).

Specifically, shareholder ratified $50 million loan transaction with IFC for financing its lending operations just as they approved a convertible loan transaction of $20 million, which approval therefore authorised the Directors to allot Ordinary Shares to IFC.

As earlier reported, the Board of Directors of FCMB anf FinBank on July 18 2011 announced the execution of a definitive agreement for the recapitalisation of FinBank and the combination of both banks.

According to both Banks in a Joint Press Statement, the combination will involve a Scheme of Arrangement followed by a Scheme of Merger, to be executed in accordance with the laws of the Federal Republic of Nigeria.

The combined Bank will be a unique financial institution, with proven corporate banking capabilities, strengthened commercial banking business and a robust platform for retail growth. The merged entity will also benefit from complementary transactional banking platforms and offerings. Furthermore, the combined entity will better leverage capital, optimize synergies and drive shareholder value.

The parties will now commence the process of a Scheme of Arrangement, which will be subject to the approval of FinBank and FCMB shareholders, the Central Bank of Nigeria, the Securities and Exchange Commission, The Nigerian Stock Exchange and the Federal High Court.