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ACA Plans To Invest Revenues from Sale of MTN Shares in Union Bank
Business News (Finance) — AFRICAN Capital Alliance (ACA), the core investor in Union Bank of Nigeria Plc, plans to invest the money harvested from the sale of its shares in MTN Nigeria in the Nigerian Bank.
THE CITIZEN learnt that the private equity company provided the bulk of the shares sold to Shanduka Group by three Nigerian investors.
ACA has invested about $500 million in Union Bank and plans to invest an additional $250 million in the bank as it was originally agreed to in the purchase agreement.
A source close to the venture capital firm said that it treasures its stake in the bank and was in a hurry to revitalize the bankâ€™s operations.
â€œGiven the pedigree of Union Bank in Nigerian financial system, ACA believes that with the right mix of initiatives it wonâ€™t be long before the bank would tide over. They project that under three years of consistent reforms they could turn the business into a cash cow.
ACA alongside two other private investors including private equity company African Capital Alliance sold their shares to Shanduka Group. The deal is worth about $350 million. MTN Nigeria, with the MTN Group valued at $36 billion and the Nigerian business alone valued at $10.8 billion.
MTN Group in a 2007 private placement, sold a total of 43,024,602 â€œMTN Nigeria linked unitsâ€ or shares at $24.56 per unit, intended to raise the Nigerian ownership of MTN Nigeria to 21.4 percent.
It was learnt that Standard Chartered alerted Shanduka Group to the opportunity and also helped finance the purchase through debt and equity.
With the development the proportion of interests held by Nigerians in the MTN Nigeria has further diminished.
Attempts made to reach ACA proved abortive as both telephone calls and electronic message sent to their office were not responded to.-Businessnews.com.ng