The US private equity firm Milost Global Inc., plans to inject up to $ 1 billion to recapitalize the Nigerian bank Unity Bank Plc., Weakened by the economic slowdown of the country.
Based in New York, Milost has proposed to invest $ 700 million in shares and $ 300 million in five-year bonds that can be converted into shares of the Nigerian bank, notes the Bloomberg website. The firm will get an initial stake of about 30% in Unity Bank in exchange for its first $ 250 million capital investment.
The first part of the agreement is expected to be completed in the second quarter, while the remainder will be drawn at intervals over a four-year period, provided that Unity Bank has sufficient shares to issue in Milost.
Unity Bank, formed from the merger of nine banks between December 2005 and March 2006, announced last April that it was in talks to sell its non-performing loans in order to avoid penalties after missing a deadline set by regulators for its recapitalization.
Many Nigerian banks are forced to rebuild their capital, after the fall in oil prices and triggered a shortage of foreign exchange. The contraction of the country’s economy in 2016 also made repayment of loans difficult.
