N25bn Capital: Banks Form Consortium
CBN advised on N15m security contract
Following the recent directive by the Central Bank of Nigeria (CBN), an unspecified number of banks in the country have formed a consortium in order to meet the mandatory N25 billion recapitalisation order. Banks that comply would begin to manage Nigeria's foreign reserves.
Chairman of Intercity Bank Plc, Alhaji Falalu Bello, disclosed this at the weekend during the bank's extra-ordinary general meeting in Kaduna.
Bello announced the decision of the board of Intercity Bank to either merge with all or some of the banks in the consortium or merge with First Interstate Bank (FIB) and build up a capital base of N10 billion and, "thereafter look around for small banks to acquire in order to meet up with the required capital".
The meeting equally adopted four resolutions of the board, aimed at further consolidating the financial base of Intercity Bank. The resolutions are:
that the board is authorised to list the bank's shares by introduction at the Nigerian Stock Exchange
in order to meet the statutory requirement for banks as directed by the regulatory authorities, the directors may, if they deem it fit, enter into any compromise, arrangement, reconstruction, take-over merger and acquisitions with other companies or investors and may appoint such professional advisers as may be required, subject to the approval of the scheme by the respective regulatory authorities
that the authorised share capital of the bank is hereby increased from the present N2 billion ordinary shares of 50 kobo each, ranking parripassu in all respect with the existing ordinary shares of the bank and the memorandum and Articles of Association of the bank be amended accordingly
the directors are hereby authorised to issue, out of the un-issued capital of the company, N6,971,067,750 ordinary shares of 50 kobo each.
Bello had earlier listed some of the benefits of complying with the CBN directive to include, authorisation to deal in the official Foreign Exchange Market, custody of public sector deposits, operating collection accounts for government ministries, parastatals and agencies and prospects of managing Nigeria's foreign reserves.
He explained that the recapitalisation which must be concluded by December 31, 2005, would be restricted to either merger, takeover, acquisition, fresh capital injection, capital restructuring or a combination of some or all of these. Bello defined capital base as shareholders' funds unimpaired by losses, paid-up irredeemable preference shares inclusive.
Meanwhile, the management of the Central Bank of Nigeria (CBN) has been urged to look into two companies that have bidded for the hi-tech security installation of the Deputy Governor's residence in Maitama Abuja as one of them waws still being investigated for an alleged fraud in the renovation of the residence of the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) in Asokoro, Abuja. The company as was reported exclusively by THISDAY on June 28, 2004 apart from being accused of having connived with some staff in the NNPC to inflate the cost of the contract, did not go through due process for the contract.
THISDAY learnt, that the company being interrogated was on the way to clinch another contract deal for the hi-tech security installation (including infra-red interlock) for the residence of the Deputy Governor of CBN worth N15 million and sources from the apex bank are worried that an outfit that was indicted and being investigated in its deal with NNPC was allowed to bid for a sensitive project like that in the CBN with the collaboration of top ranking staff of the security department of the bank. They therefore called on the Central Bank management to carefully study the company's biding for the contract for transparency and to ensure that due process is followed.
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