Milost ends $1bn with Unity Bank

March 28th, 2018

Milost Global Inc.A�has ended talks to provide $1 billion toA�Unity Bank Plc, saying it received threats that it will be run out of the country if the deal continues.

The New York-based private-equity firm had agreed to provide debt and equity on the understanding that Unity would delist in Nigeria to have its stock traded in the U.S., Milost said in an emailedA�statementA�on Monday. The term sheet was signed and approved by the board of Unity, which needed the capital to strengthen its balance sheet and to expand, the firm said. It would ultimately have acquired 60 percent in the Lagos-based bank.

Shortly after news of the dealA�brokeA�on Bloomberg, a�?Milost started receiving threatening emails from a gentleman who says he is politically connected to the powers that could shut Milost out of Nigeria if Milost didna��t terminate the Unity Bank transaction,a�? the private-equity firm said. Negative articles started appearing in the local press and last week, Unity issued a a�?false statement which denied signing a binding commitment agreement,a�? Milost said.

The firm said it will file a lawsuit against BusinessDay Nigeria for publishing what it said was false information. Anthony Osae-Brown, the editor for BusinessDay, said he couldna��t immediately comment when contacted by email.

Unity Bank didna��t immediately respond to requests for comment, saying it will respond later. Isaac Okorafor, a spokesman for theA�Central Bank of Nigeria, said he was not in a position to comment when contacted by phone.

a�?Transparency is important in a negotiation and information should be well manageda�? to ensure the parties involved in talks meet their objectives, Sewa Wusu, an analyst for SCM Capital in Lagos, said by phone. a�?Unity Bank needs capital.a�?

Unity, which was formed out of the merger of nine banks between December 2005 and March 2006, said in April last year that it is in talks to sell its non-performing loans to avoid penalties after missing a regulatory deadline to file its recapitalization plans. Shares in the company slumped 4.4 percent to 1.29 naira in Lagos trading.

Some small- and mid-sized Nigerian lenders are battling to rebuild capital levels after a slump in world oil prices left the country short of foreign currency. The economy shrunk in 2016, making it difficult for businesses to repay loans.

Milost, which has $25 billion in committed capital, will focus on its other investments in Nigeria, Chief Executive Officer Kim Freeman said in the statement. The firm will soon release $21 million to oil-services company Japaul Oil & Maritime Services Plc and another $10 million to Resort Savings & Loans Plc.

The private-equity firm has said it is targeting companies that trade at less than half of their intrinsic value. Ita��s using a facility that it calls the Milost Equity Subscription Agreement, which combines debt and equity.

Similar Post You May Like read more
Just In read more