Reports by Bloomberg suggest Milost Global will invest $1 billion in tier two lender Unity Bank. The firm had in February disclosed that it was in discussions with the Central Bank of Nigeria (CBN) regarding investment in a tier two bank.
This marks the fourth major investment Milos has made in the Nigerian economy. Earlier this month, Resort Holdings had earlier this month announced it had secured $350 million investment from Milos. In February, Japaul Oil announced it had signed a $350 million financing agreement with Milos. The funds will be channelled towards its mining projects.
In January, Milost Global acquired Primewaterview Holdings Nigeria Limited for $1 billion. Primewaterview is a diversified holding company with a portfolio of Real Estate, Oil & Gas, Quarry Mining, Healthcare and Power.
How much will Unity Bank receive?
An initial investment of $250 million will be invested in the bank in exchange for a 30% equity stake. $750 million will then be invested over the next four years.
Unity Bank closed at N1.42 on Friday’s trading session on the Nigerian Stock Exchange (NSE). Year to date, the stock is up 167.92%, outperforming the NSE All-Share Index. Results for the 9 months ended September 2017 show the bank had gross earnings of N65 billion and a profit before tax of N2.7 billion.
Tier two banks have had to boost their capital adequacy ratios, due to the tough macroeconomic crisis. Union Bank last year raised N50 billion through a rights issue and has signalled its intentions to raise a Eurobond. Stanbic IBTC gave shareholders the option of receiving shares equivalent to dividends declared.
Diamond bank another tier two bank has had to sell non-essential assets. FCMB has hinted at an upcoming bond raise.
Milost Global, founded by Mandla J Gwandiso in 2015 is an American Private Equity firm that is headquartered in New York City, with more than $25 billion in committed capital. The firm has investments across several industries including Technology, Transport, Cannabis, Education, Distribution, Mining, Oil & Gas, Financial Services, Healthcare, Pharmaceuticals, Real Estate, Alternative Energy and Infrastructure Development.
Unity bank was founded in 2006 from the merger of 9 commercial banks namely; Intercity Bank Plc, First Interstate Bank Plc, Tropical Commercial Bank Plc, Pacific Bank Limited, Centre Point Bank Plc, Societe Bancaire Limited, NNB International Bank Plc, Bank of the North Ltd and New Africa Bank Plc. This is following the consolidation exercise mandated by the Central Bank of Nigeria (CBN) in 2004
