After much drama and evasive brick bats, private equity firm Milost Group has ended talks to buy stake in Unity Bank.
The latest development is coming after a public rebuttal by Unity Bank disclaiming that it had no agreement with Milost Group to take any $1 billion from the the latter for a stake in the bank.
Unity Bank is a mid-sized lender in Nigeria with a huge non-performing loan portfolio in its books.
The Managing Partner and CEO at Milost Global Inc., Kim Freeman told on August 7, 2017, Milost Global received a request for a call with the CEO and CFO of Unity Bank Plc, adding that on the call, Unity Bank expressed its interest in working with Milost Global as its funding partner for its growth plans in Nigeria.
Freeman explained: “Following the call, a desk top due diligence was conducted by Milost to its satisfaction. On September 4, 2017 a $1billion financing term sheet was fully executed by both Milost and Unity Bank.
“The facility, a combo of equity and debt, was provided on the exciting understanding that Unity Bank would delist on the Nigerian Stock Exchange and move its listing to the USA. The signed term sheet was approved by the board of Unity Bank.
“On Monday, October 23, 2017 at 11:05 EST, Milost Global Inc. was visited by Mrs. Oluwatomi Somefun, the CEO of Unity Bank Plc, at its New York Offices. The meeting was scheduled for 11:00am EST and it went ahead as planned.
“The meeting was attended by Milost Global Inc. analysts and the Chairman, Mr. Egerton Forster. At the meeting, she explained the need for capital funding at the bank and also their expansion plans. It was then agreed that Milost Global Inc. would start further due diligence on Unity Bank.
“It is normal practice for all the publicly quoted companies which we fund to notify the market regulator on signature of the commitment letter since it has material effect to the stock; however, Unity Bank did not. Milost assumed that this did not happen because Unity had agreed to move its listing to the USA.”
Contrary to Freeman’s position, an official Unity Bank who spoke ThisDay newspaper said: “We are aware of the discussions, but at no time did we commit to anything. In fact, at the so called meeting they said we had in their New York, our CEO happened to be in New York and stopped by at their office just to check them out, to see if they are real or not.
“There was no commitment on our part and that is what we are quarrelling about. They sent us a letter of intent, but we did not respond. Something is not quite right.
“We sent the letter they sent to us to the Central Bank of Nigeria (CBN), just to notify the central bank and that there was no commitment. We were still asking them about the source of their fund because we weren’t sure of the source of the fund.
“We needed to be sure that they are for real because we have had all sort of clowns coming to say they want to invest in Unity Bank. The so called meetings they said we had were exploratory on both sides. It was not a formal meeting at all and the next thing we saw in the papers was that they are investing $1billion in Unity Bank.”