Oceanic to Give Amcon Stake for Bad Debt Before Ecobank Takeover
The Asset Management Corp., known as Amcon, will receive equity in Oceanic, which signed a deal to be acquired by Ecobank Transnational Inc. (ETI), for taking the bad debt, Nonye Mpho, a spokeswoman for Oceanic, said in a phone interview from Lagos today. Amcon will take enough of Oceanic’s nonperforming assets to “bring the net asset value to zero,” she said.
“This is not a loan write off,” Nonye said, denying a report in the Lagos-based ThisDay newspaper that Amcon had written off 290 billion naira ($1.9 billion) non-performing loans of Oceanic Bank to enable Ecobank to recapitalize it.
Details of the Amcon investments and equity allotments will be made public soon, she said. Amcon will transfer its holding in Oceanic to Togo-based Ecobank once the lender’s purchase is complete, Nonye said.
Oceanic Bank, which was bailed out by the Central Bank of Nigeria in 2009, was among eight lenders whose chief executives were fired by policy makers after a lending crisis threatened to collapse some of the country’s financial institutions.
The central bank rescued the lenders with 620 billion naira and created Amcon to buy nonperforming loans to enable banks to rebuild balance sheets and resume lending. It gave the banks a Sept. 30 deadline this year to recapitalize or face liquidation or nationalization.
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