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The Corporate and Investment Banking division of Barclays Africa Group Limited (Barclays Africa) acted as the sell-side advisor to the state-owned Asset Management Corporation of Nigeria (AMCON) in the sale of Mainstreet Bank to Skye Bank. The deal is the largest acquisition of an African bank in 2014.
“This is a landmark achievement for AMCON and the Nigerian banking industry,” said Stephen van Coller, Chief Executive of Corporate and Investment Banking at Barclays Africa. “Barclays Africa is pleased to have helped AMCON realise its ambitions, and we remain committed to expanding African financial markets and to delivering world-class financial services across the continent.”
AMCON was established in 2010 to efficiently resolve the non-performing loan assets of the banks in Nigeria, acquire distressed Nigerian banks and stabilise the industry after the Nigerian debt crisis. AMCON separated the toxic assets of the affected banks and injected capital into the businesses in order to restore them to profitability. As part of this process, AMCON took over the assets of three banks that were considered particularly distressed and housed their revitalised assets in three new banking entities, namely Mainstreet Bank, Keystone Bank and Enterprise Bank.
Mainstreet Bank created
Mainstreet Bank was created to house the assets and some liabilities of the defunct Afribank Plc and establish a viable enterprise. The restructure included staff-reorientation, recruitment of new staff, branch modernisation, and migration to an upgraded core banking software package.
The revitalised bank currently services approximately 1.9m customers in Retail Banking, Corporate Banking, Commercial Banking and Treasury through a distribution network of 201 branches, nine cash centres and 200 ATMs.
Barclays Africa acted as joint sell-side advisor in partnership with Afrinvest West Africa, a Nigerian firm involved in investment banking, securities trading, asset management and investment research in West Africa.
Only global advisor
“As the only global advisor involved in the transaction, Barclays Africa, in enabling AMCON’s vision, was able to draw on its resources and pull together a bespoke team to provide international best practice in concert with deep local expertise,” added van Coller.
The Barclays team advising on the sale of Mainstreet Bank comprised professionals from the global financial institutions team as well as Lagos and Johannesburg based corporate finance and M&A teams.
In conjunction with the global Barclays team and industry coverage bankers, Barclays Africa provides strategic advisory services on acquisitions, divestitures, restructurings, leveraged buyouts, takeover defence, special committee assignments and exclusive sales across the continent. Barclays Africa’s track record of delivering strategic advisory services in Africa was recently recognised when the bank was named the ‘Best Investment Bank in Africa’ and ‘Best M&A House in Africa’ at the Euromoney 2014 Awards for Excellence.
Sustainable competition
“As represented by the Mainstreet Bank deal, consolidation of the banking industry in Nigeria is creating more sustainable competition in the market and repositioning the industry to meet national and global economic challenges,” added Hasnen Varawalla, Head of Corporate Finance, Barclays Africa.
The transaction is dependent upon conditions precedent and approvals from the Securities and Exchange Commission of Nigeria and the Central Bank of Nigeria.