Titan Trust Bank has debunked
media reports alleging illegalities in the acquisition of Union Bank of Nigeria
Plc.
In a statement by the management
of the bank made available to the media on Sunday, the lender insisted that the
transaction followed due process and met all regulatory requirements, including
that of the Securities and Exchange Commission and the Central Bank of Nigeria,
CBN.
The statement further noted that
the former Governor of the CBN, Mr. Godwin Emefiele has no link with the
ownership of the bank.
The statement reads: “The
attention of the Board and Management of Titan Trust Bank Limited has been drawn
to the widely circulating report of the special investigation into the
activities of the Central Bank of Nigeria wherein among other things allegation
of illegal acquisition of Union Bank of Nigeria Plc (Union Bank) by Titan Trust
Bank Limited (or TTB, the Bank) has featured prominently.
“We are aware that our customers,
shareholders, employees, and other stakeholders of the two banks will naturally
be troubled by this allegation. Consequently, the Board and Management of Titan
Trust Bank Limited wish to make the following clarifications to set the records
straight.
“On December 18, 2021 Titan Trust
Bank Limited (on the buy side) signed a Share Sale and Purchase Agreement (SPA)
with Atlas Mara Limited, Union Global Partners Limited, Emeka Emuwa, Standard
Chartered Bank, Montane Partners West Africa Limited, TLG Africa Growth Impact
Fund, and Sanlam Life Assurance Limited on the sale side (otherwise referred to
as the “bulk shareholders”). The bulk shareholders together owned 93.41% of
Union Bank’s issued ordinary share capital. The SPA was a product of a long and
tortious due diligence process which involved leading financial and technical
advisers. Titan Trust Bank engaged reputable firms like PricewaterhouseCoopers
Limited (or PWC) for the financial due diligence, Drey Law Practice (DLP) for
the legal due diligence, Norton Rose Fulbright (NRF) UK as legal Advisers and
Citibank London as financial/Transaction Advisers. The Bulk shareholders
engaged a prominent UK Law firm of White & Case as their Legal advisers on
the transaction.
“The acquisition was conducted in
the most professional, open, and transparent bidding process. The acquisition
was funded by a combination of debt ($300 million) and additional equity
injection of about $190 million which was contributed by TTB’s two major
shareholders – Magna International DMCC, and Luxis International DMCC. The
Certificates of Capital Importation (CCI) for both the debt and the equity
financing evidencing the receipt of these funds into Nigeria by legal means
have been made available where requested. The $300 million acquisition facility
is sourced from Afreximbank and is priced on SOFR with a margin of 6.25% (all
together almost 12% pa) and a moratorium period of 30 months. TTB has paid
interest on the loan for three interest periods (18 months so far).
“TTB sought and obtained all
necessary regulatory approvals from its primary regulator – the Central Bank of
Nigeria (CBN), the Securities and Exchange Commission (SEC), the Nigerian
Exchange Limited (NGX), the Federal Inland Revenue Service (FIRS) among others.
“Following TTB’s acquisition of
93.41% controlling interest in Union Bank on June 1, 2022 a change in control
was effected with the dissolution of the former Board and the reconstitution of
a new Board with new leadership.
“TTB proceeded to conduct a
Mandatory Takeover Offer (MTO) which was legally triggered by the acquisition
of 93.41% of Union Bank by TTB which brought the percentage float of Union Bank
shares to less than 20%. The purpose of the MTO was to give the minority
shareholders the opportunity to offer their own shares on the same terms as was
offered to the bulk shareholders. The MTO was conducted after all due
regulatory approvals were obtained.
“The slow pace of TTB’s
acquisition and ultimate merger with Union Bank has been because of TTB’s and
the regulators’ determination to ensure that the process remains fully
compliant with extant laws, meets best global practices, and is conducted in
open and transparent manner.
“During the special
investigation, the Board and Management of TTB and Union Bank have made all
representations to the investigation team. There is no illegality or fraud in
the acquisition as alleged. We insist that this acquisition can vie for one of
the most professional and transparent in the history of this country.
“On allegations relating to the
ownership of Titan Trust Bank, the Board and Management provided to the special
investigators with the share ownership structure in TTB including the holdings
of Magna International DMCC and Luxis International DMCC owned by Mr. Rahul
Savara and Mr. Cornelis Vink. These individuals are prominent global
entrepreneurs and have thriving businesses in Nigeria and several countries
around the world. The shareholding structure is also verifiable at the
Corporate Affairs Commission (CAC).
“We, therefore, urge our
customers, shareholders, and all stakeholders to remain calm as we are doing
everything legal to ensure that the current misunderstanding is clarified,” the
statement said.
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