Welcome to Corporate News roundup for the week ended August 24, 2018. Corporate News roundup is a weekly roundup of corporate news and action that took place the previous.

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We begin with news of a surprise takeover of Skye Bank by the CBN. The CBN announced that it has revoked the license of the bank with immediate effect. The apex bank claimed that it took this decision after “result of its examinations and forensic audit of the bank revealed that the bank required urgent recapitalization, as it could no longer continue to live on borrowed times with indefinite liquidity support from the CBN.

Shareholders were, however, unable to recapitalize it.” The bank, as you
probably know already, is now to be called Polaris Bank Ltd.

Now to the back story.


On July 4, 2016, the CBN dissolved the board of Skye Bank, asking all the directors of the bank to resign. The CBN then appointed an interim board and claimed then that this was not a “takeover” of the bank.

The CBN also injected about N100 billion in the bank a few weeks later to help shore up its capital. This helped avoid a run on the bank, allowing it to operate until its license was revoked on Friday. Since then, the CBN has been supporting the bank, as the board it appointed struggled to raise capital. Reports indicate that the CBN has injected over N700 billion so far.

Eventually, seeing that the rot in the bank was a huge snag to a potential acquisition, it decided to create a bridge bank, transferring the asset and liabilities of the bank to Polaris Bank.


It is interesting to note that just a year before it sacked the board of Skye Bank and injected the first N100 billion, the CBN had approved the sale of Mainstreet Bank (another bank nationalized by the CBN) to Skye Bank for about N126 billion.

The money was paid to AMCON, whose largest shareholder is the CBN. From 2016, when Skye Bank was operating on life support from the CBN, it did not release any interim or audited results, yet its share price traded on the Nigerian Stock Exchange.

So, without results, CBN appointed a board in control. What could the existing
shareholders have done? However, the CBN explained that one of its reasons for revoking the license of the bank was because its shareholders had not been able to raise capital.

Another wild fact is that, as at close of business on Friday, Skye Bank shares were up 54% YTD compared to the Nigerian Stock Exchange which was down 14.91% YTD. This can only happen in Nigeria, right?


During the week, Union Bank Plc announced that it had been granted a Mareva Injunction by a Federal High Court sitting in Lagos to seize a landed property belonging to A-Z Petroleum Limited over a N5.2 billion loan default.

The bank also asked the court for an order that would prevent the Debt Management Office (DMO), the Accountant General of the Federation (AGF), the Central Bank of Nigeria (CBN), the Federal Ministry of Finance and the Petroleum Products Pricing Regulatory Agency (PPRA) from releasing any A-Z Petroleum funds in their custody (to the tune of N5.2 billion) pending the outcome of the suit.


Multi-billion dollar internet and media giant, Naspers, has decided to list Multichoice, its pay video business, on the Johannesburg Stock Exchange next year while unbundling the shares to its existing shareholders.

The standalone unit will be called Multichoice Group and will include MultiChoice South Africa Holdings, MultiChoice Africa Holdings, MultiChoice Botswana, MultiChoice Namibia, NMS Insurance Services SA Ltd, Showmax and Irdeto Holdings. The move would enable the firm boost its valuation, as some institutional firms had refused to hold the stock because of its weighting on the Johannesburg Stock Exchange.

In the past, Naspers had indicated its intentions to sell off the pay video arm and face its more lucrative internet businesses. While Multichoice added 1.5 million subscribers in its last financial year, it contributes less than 10% of group revenue and is growing at a much smaller pace compared to other segments like Mail.Ru: and Tencents where Naspers has a significant stake.

Someday, maybe, Multichoice will also list on the Nigerian Stock Exchange.

Click this link to read more.

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