BY MICHAEL EBOH, with Agency report
LAGOS—Ecobank Transnational Incorporated, ETI, has secured a N45.6 billion ($285 million) loan from a South African bank, Nedbank, to finance its acquisition of Oceanic Bank International Plc and further pursue its growth programme across the African financial market.
According to a statement by ETI, the transaction includes a proviso that allows Nedbank convert the loan to a 20 per cent stake in 24 to 36 months.
Mr. Arnold Ekpe, Chief Executive Officer, ETI, said the deal will provide it with the possibility of taking a stake in Nedbank, subject to regulatory approvals and other geographic considerations.
He said the deal will deepen the strategic relationship between ETI and Nedbank.
According to him, by the terms of the alliance agreement, the two banks have begun to discuss the possibility of integrating more tightly in order to better exploit the obvious synergies in geography, customer base and cultural affinity.
ETI had said it would complete merging the operations of its Nigerian unit with those of Oceanic Bank by the end of next year.
ETI’s subsidiary, Ecobank Nigeria Plc informed the Nigerian Stock Exchange, NSE, of its intention to delist from the Exchange, following a proposed reorganisation of its share capital that will see its ETI owning 93 per cent of its shares.
Ecobank Nigeria and Oceanic Bank International Limited are subsidiaries of ETI, following its recent acquisition of Oceanic Bank.
The bank said as a consequence of the proposed merger, it is expected that ETI’s shareholding in the enlarged Ecobank Nigeria will increase from its current 85 per cent to approximately 93 per cent, thereby reducing Ecobank Nigeria’s minimum free float to maintain listing on NSE.
This, therefore, has necessitated the proposal from ETI to acquire the shares of the minority shareholders of Ecobank Nigeria.
Under the terms of the Scheme of Arrangement minority shareholders will receive one ordinary share in ETI to be credited as fully paid for every 5.16 Ecobank shares previously held by the minority shareholders, such that Ecobank Nigeria will be a wholly-owned subsidiary of ETI.
The directors of Ecobank Nigeria said that the proposed Scheme of Arrangement was in the interests of both Ecobank Nigeria and its shareholders.
The bank said, “The Directors of Ecobank Nigeria are of the view that the proposed Scheme of Arrangement is in the interests of both Ecobank Nigeria and its shareholders. As a consequence of the proposed Scheme of Merger, Ecobank Nigeria may no longer qualify for listing on the NSE and shareholders will therefore own equity in an unlisted public company.
“In addition, the proposed Scheme of Arrangement will enable Holders of Ecobank Nigeria Scheme Shares to own equity in ETI, which is a more liquid stock, listed on the three major West African stock exchanges and with attendant diversification benefits from ETI’s operations in 32 countries. In addition, by becoming shareholders in ETI, “Ecobank Nigeria’s shareholders will share in the benefits of the merger of Oceanic Bank with Ecobank Nigeria.”