AMCON’s MD,   Mustapha Chike-Obi

By Festus Akanbi

There were indications at the weekend that contrary to the promise by the Asset Management Company of Nigeria (AMCON) to disclose the identity of the 11 financial advisers selected for the three nationalised banks by June this year, names of the advisers are still being kept under wraps two weeks into the month of July.

AMCON’s Managing Director, Mr. Mustapha Chike-Obi, had in May announced the selection of 11 advisers out of the 44 advisers that sent expressions of interest to the corporation, promising to announce those that finally make the list by June.

However, THISDAY checks last week showed that two weeks into the month of July, the three affected banks were yet to know the identity of the 11 advisers, a development which analysts said may delay the planned listing of the three banks on the Nigerian Stock Exchange.
The three banks, which were bridged by the Nigeria Deposit Insurance Corporation in 2010, are Keystone Bank (formerly Bank PHB), Mainstreet Bank (Afribank) and Enterprise Bank (Spring Bank).

Managing director of one of the bridged banks, who spoke under the condition of anonymity with THISDAY last week, said the affected banks did not know who the 11 advisers are yet.

When asked whether the failure of AMCON to present the financial advisers to the public would affect the planned listing of the banks, he said nothing serious could be done until the advisers settled down for business.

According to him, they (financial advisers) will have to do an extensive work to determine the health of the banks because they can come up with various options which, he said, might include mergers and acquisitions, outright sale or listing.
He said no listing process could take place until the advisers settled down to work.

Asked whether he knew who the advisers were, the bank chief executive said in a text message, “No, I don’t. I understand it is a mix of international and local banks, consulting firms among others. Some are even into consortium.”

Some stockbrokers who had positioned themselves for the planned listing of the banks told THISDAY last week that nothing could be done as far as listing of the affected banks is concerned until the advisers are seen to have started their work considering the fact that their recommendations at the end of the day will determine whether or not the listing option would be upheld by AMCON.

Managing Director, Financial Derivatives Company, Mr. Bismarck Rewane, disclosed that the market was still waiting for the announcement of the names of those to determine the direction of the nationalised banks.

“The names of the advisers to these banks haven’t been released and there is no way anyone can talk about listing or other options for the affected banks until this are sorted out,” Rewane told THISDAY.

Attempts to speak with the AMCON chief executive did not yield result as calls to his phone were not answered. A text message sent to him was not acknowledged either.

Chike-Obi had said in May, “We are now in the process of evaluating what the nationalised banks are worth. We received 44 Expressions of Interest from different advisers, but we shortlisted 11 entries that will soon get requests for proposals. So, in the next four to six weeks from now AMCON will announce the advisers for the nationalised banks.

“In the proposal, we will specify what we want them to do and they will give out their fees. But this is going to take a while and will be very transparent.”

Chike-Obi pointed out that the corporation would get the best return, adding that the whole process would be done in the best interest of the financial sector.

The AMCON boss added that the corporation needed the advisers to know the present worth of the banks.
He said, “Selling a bank is a serious matter. We don’t know what the banks are worth today. We need experts to go into the banks and value what their current worth is. For us to say this is how much we are selling this, we need to know the value.

“Also, we need the experts to go into the banks to tell us the best options open to us. From there, we will come up with our plans. Selling a bank is not like selling a piece of corn, it’s a complicated process. So yes, we will get advisers, look at different options available to us and come up with plans. People should be patient.”

Also speaking on the options being pursued by the corporation for the banks, he said: “One of the options available to AMCON is to take these institutions public, so that the Nigerian public can have a chance to invest in them. So, we want to look at all the options before we start thinking of who the ultimate investors would be. It is only on the basis of that advice and examination that we will come to the best way of selling these banks.”

He disclosed that over 20 different bodies – banks and other investors – had expressed interest in the three bridged banks. “We have not got to the stage when we can consider those expressions of interest yet. The process to get there requires: AMCON appointing an adviser that will evaluate and determine the value of the banks, evaluate all the options available to AMCON,” he said.