By InvestAdvocate

Lagos (INVESTADVOCATE)-Nine Directors have resigned from the Board of Finbank Plc following the ongoing takeover bid of the Bank by First City Monument Bank (FCMB)

This was contained in a notice Wednesday from the Bank to the Nigerian Stock Exchange in Lagos Nigeria.

“Finbank Plc has notified The Exchange that nine of its Directors have voluntarily resigned following the recapitalisation agreement reached between the Bank and First City Monument Bank Plc” the notice said

Among the Directors that resigned include T.C Onasanya, T.C, Onasakpo, Aliyu Obabiolorunkosi, Opeyemi Adegboyega Oye, Agnes Ebubedike and Kenny Odogwu.

Others are Lamba Zannah, Umaru Usman Karaya and Ernest Oji.

This is coming on the heels of a recent Report by a Newspaper; Daily Trust that the proposed acquisition of FinBank Plc by FCMB has suffered a setback following a recent discovery of hidden loans and huge debt profile of the Bank.

The paper was quoted as saying that a Source name (withheld) at Nigeria’s Securities and Exchange Commission (SEC) disclosed this to it.

“A source at the Securities and Exchange Commission (SEC) in Lagos said that debt issue was responsible for the delay in approving the two months old take-over bid. “Finbank has numerous issues, especially bad loans that need to be addressed” the Paper said.

This is coming on the heels of earlier reports that Shareholders of FCMB on September 29 2011 approved the Acquisition and Merger deal with Finbank at an Extra Ordinary General Meeting (EGM) held in Lagos Nigeria.

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.