Advisers bidding for mandates from Nigeria’s bad bank Amcon
Euromoney has learned that advisers are bidding for mandates from state-owned bad bank Asset Management Corporation of Nigeria for the sale of the three rescued banks nationalized after failing to find suitors
Euromoney has also learned that investment bankers are also advising local and regional firms on acquiring Nigerian banks, other than these three.
At various intervals since 2009, in exchange for government-backed bonds, Amcon has bought much of the sector’s bad debt: perhaps as much as 50% of total loans, according to an Amcon executive quoted by Reuters in November.
In August, a deal was sealed for Amcon to raise new bonds and inject enough capital into the bridge banks – N675 billion ($4.2 billion) – to bring their equity from well below zero to the N25 billion regulatory minimum.
In the latter part of 2011, the authorities pushed those banks that had survived the 2009 fallout to offload to Amcon any further systemically important loans by the end of December. The aim was to bring the sector bad-debt level down from around 7.5% in mid-2011 to below 5%, in time for a new start in the 2012 financial year.
The central bank hoped it would be enough to enable the new management Amcon has appointed to rebuild businesses that might be attractive to future buyers.
In January, Amcon said it will focus on credit restructuring and debt collection in 2012.
For more in-depth coverage on the Nigerian banking sector, read the latest feature in the March edition of Euromoney magazine.