deenee:



There is also one misconception that I would like to correct here, the funds used in this regard is not ‘tax payers’  money as you and most people connote.  Funds have been provided via the CBN( lender of last resort) through AMCON ( a special purpose vehicle) and in the form of debt.

Please, don't turn facts upside-down in your bid to defend this aberation. The money injected by CBN is taxpayers money. Who owns the Federal Government? The people. Infact, the government is a 'duly appointed' agent of the people. Who owns the CBN? The Federal Government. This implies that the people own CBN. As the lawyers say,"he who acts by an agent, acts himself". In fact, the Central Bank of Nigeria Decree No. 24 of 1991 clarifies all this. I am quoting from Section 4

4.        (1)       The authorised capital of the Bank shall be three hundred million naira.
          (2)       All the capital of the Bank shall be subscribed and held only by the  
                     Federal Government.
          (3)       The paid-up capital may be increased by such amount as the Board may,
                     from time to time, resolve with the approval of the President, and shall
                     be subscribed by the Federal Government and paid-up at par

@Dancewith, You are correct to say that the management of the nationalised banks were playing ’ hard ball’ but to the detriment of who?- the common shareholder of course; like you, I and others who have invested their ‘hard earned cash’ in these corporations, believing that they would be viable and alternative sources of income in the near term. ‘Nationalised’ or not, the management have benefited from the huge severance packages paid to them and we the shareholders are left with nothing. Let me ask this, when was the last time any of these banks paid dividends or issued bonus shares to their investors? More worrying, is the fact that the institutional investors (a lot of whom saw the ‘hand writing on the wall’) had divested majority of their holdings long before the 'financial impasse' started. Also, what is the current market price of these stocks? Once again, I still state that AMCON has only acquired the ‘eligible performing assets’ in the case of Intercontinental to create liquidity whilst it has contributed an ‘equity stake’ to the nationalised banks. Hence, the reason for the take-over of the banks concerned and deployment of new management. I think that, we are mixing up the scheme and order of things as regards the role that AMCON has played and will play in this ‘impasse’ now and in the future. The transactions consummated are done on a ‘case by case’ basis and not one’ blanket transaction’ for all supposedly distressed banks.

@Maawitemi, I have read your article on the potential investors and I have this to say- signifying an ‘intention to enter into negotiations’ for a deal is not an overall indication that the deal would scale through or that the investment considered for the deal is a worthwhile one. Take the case of PHCN, a lot of potential investors are interested in acquiring the firm but after conducting ‘due diligence’ posit that it would cost more to turn around the ‘moribund’ utility firm even if, it was bought for ‘peanuts’ and thank you for the other comment!

s Name
Written by Demola Abimboye
Sunday, 13 March 2011
Shareholders of Intercontinental Bank
PLC protest the proposed acquisition of
80 percent equity holdings in the bank by
Access Bank PLC, a smaller outfit, as a
fraud
In Nigeria’s banking circles, the deal is
seen as an irony. Up till August 2009,
United Alliance, a company owned by Aig
Imoukhuede and Herbert Wigwe,
managing director and deputy managing
director respectively of Access Bank PLC,
owed Intercontinental Bank PLC a hefty
N13 billion. Promptly, the Central Bank of
Nigeria, CBN, published the company’s
name and the owners among those who
contributed to the downturn of
Intercontinental Bank’s fortunes. This
necessitated CBN’s intervention in the
management of the bank and led to the
removal of Erastus Akingbola and other
members of his management.
But like the prophetic story of thin cows
swallowing fat ones which Joseph told
Jacob, his father, in the book of Genesis in
the Christian Bible thousands of years
ago, Imoukhuede and Wigwe’s Access
Bank, a much smaller bank according to
bankers, is set to acquire 80 percent of
the bigger Intercontinental Bank Plc for
N50 billion only.
Before the takeover by CBN,
Intercontinental Bank had a balance sheet
of N1.6 trillion, paid-up capital of N230
billion, 330 branches, two foreign
subsidiaries, 10 well- established
subsidiaries and 12,000 members of staff.
Access Bank on the other hand had total
asset of $4.8 billion, about N720 billion,
118 branches and 1,480 employees.
Not only the founders and shareholders
of Intercontinental Bank are confounded
by the unfolding drama but also bankers
even within Access Bank. Newswatch
learnt that in spite of pending legal suits
against the planned merger and
acquisition, M&A, the two parties drew up
a memorandum of understanding, MOU,
on February 6, 2011. The 27-page
document was prepared by three firms -
Olaniwun Ajayi LP, Kolawole Awodein &
Co and Jackson Etti & Edu. It stated that
Access’ Bank’s decision “to invest in and
consequently merge with Intercontinental”
was based on the CBN order of August 14,
2009 “that Intercontinental should take
immediate steps to ensure that the bank
is fully recapitalised” and also because
“Intercontinental Bank invited offers from
potential investors for the injection of
additional capital with a view to
complying with the CBN order.”
A worried banker described the terms of
the MOU as unfair. Some of the
provisions were that the Asset
Management Company of Nigeria,
AMCON, should buy the bank’s bad loans
and give financial accommodation and
that Intercontinental Bank’s shares shall
be reconstructed by cancellation of old
shares and creation of new ones. The
shares will be on technical suspension and
so would not be listed on the stock
exchange. AMCON and old shareholders
would share 20 percent of the bank’s
total shares. Thereafter, the bank would
be dissolved without being wound up.
There are concerns about the cheap price
the buyer is offering, a mere N50 billion
for 80 percent of the bank. On January 11,
2011, Mahmoud Lai Alabi, the CBN-
appointed managing director of
Intercontinental Bank following removal
of Akingbola in August 2009, announced
to the world through text messages that
the bank “closed 2010 with N617 billion
core deposit, over N146 billion bonds from
AMCON and remained stable and strong.”
How come the sudden turn around to sell
a stable and strong bank for peanut?
A source said the Access Bank officials
were surprised when they examined
Intercontinental’s books and discovered
its size of deposit, good customer names
and successful banking products. “They
could not believe their luck and the big
opportunity the forced sale, which the
CBN order meant, was bringing to them.”
More worrisome is how Access Bank
plans to raise money for the purchase.
But insiders in the bank revealed that
Imoukhuede and Wigwe are banking on an
alleged plan for the clever manipulation of
the system. Massive funds are currently
being channelled to the Bank of Industry,
BoI, by the CBN as intervention funds for
the textile industries and other start up
businesses. A source said that Evelyn
Oputu, chief executive officer of BoI, is
Imoukhuede’s mother-in-law. The Access
boss has leveraged on this to get her to
deposit a substantial part of these huge
funds as inter-bank placements with long
tenor in his bank. It is alleged that it is
from these BoI funds that Access Bank
will use N50 billion to buy Intercontinental
Bank. As soon as Access takes over
Intercontinental, it will immediately return
the peanut purchase price to itself and
ultimately BoI.
Some shareholders said the entire
process lacks transparency. It does not
allow for competitive bids but specially
designed to favour Access Bank. Since
2009 when eight bank chief executives
were sacked, no independent assessors
have been appointed to verify the books
of the banks. Rather, only the CBN-
handpicked managers have been dishing
out figures that the banks were
inadequately capitalised. The
shareholders contended that if N50 billion
is all Access Bank is putting on the table,
why couldn’t the CBN request the
shareholders to bring in even N100 billion.
“This is fraud. Why is the CBN running
away from the shareholders who can
recapitalise it,” a source asked. He said
that “Chukwuma Soludo, former CBN
governor, realised this and gave the
banks time to raise their capital base from
N2 billion to N25 billion in 2005.
Within a few months of its creation,
AMCON has heavily discounted
Intercontinental’s non-performing loans
and introduced liquidity over and above
the N100 billion the CBN said the bank
needed in September 2009. Thus, if there
is any capital shortfall, both the
Companies and Allied Matters Act, CAMA,
and Banks and Other Financial
Institutions Act, BOFIA, require all existing
shareholders to have the first right to
recapitalise the bank. They would then, at
an extra-ordinary general meeting, EGM,
authorise the board and management to
go and source for investors rather than
the ongoing practice of imposing an
institutional investor on the bank.
It is also being alleged that Access Bank
may be fronting for some powerful
Nigerians. A source said the bank would
only keep 40 percent of Intercontinental
Bank while the balance of 40 percent
would be held in trust for some people
allegedly including Bukola Saraki, Kwara
State governor, whose companies got
about N7 billion debt waivers after
Akingbola was eased out of the bank in
2009. Indeed, when Akingbola returned to
Nigeria seven months ago, he had alleged
that Alabi was an employee of Saraki as
chairman of Songa Farms and several
development funds in Kwara State. On
assuming office, one of Alabi’s first steps
was to write off Saraki’s loans to the tune
of N7 billion. The loans were given to
Linkers, Dicetrade, Skyview Properties
and Joy Petroleum. He also allegedly
wrote off loans totalling N32 billion for
some other people. According to
Akingbola, all the written-off loans had
been classified as “good” and
“performing” by CBN examiners.
The shareholders have resolved to fight
the planned sale to a logical end. Three
weeks after the two banks prepared the
MOU, Okoli Frank Emeka, leading nine
other shareholders of Intercontinental
Bank, instituted a suit number FHC/L/
CP/254/11 at the Federal High Court,
Lagos, against Intercontinental Bank,
Access Bank, CBN and 14 others. In it,
they said that contrary to the provisions
of the memorandum and article of
association of the bank and in a manner
grossly oppressive and or unfairly
prejudicial to the shareholders
particularly the petitioners and their
interests in the bank, Mahmoud Lai Alabi,
managing director of the bank and second
defendant in the suit, as well as other
directors under the active direction of the
CBN and or its governor, have sought and
or are seeking to convert the N100 billion
injected into the bank in August 2009 into
an equity shareholding in the bank in
favour of the CBN and or its nominees.
They decried the attempt to dispose off
the bank’s assets, shareholdings and
rights of the shareholders without
reference to them particularly, since the
preparation of the MOU between Access
and Intercontinental on February 6, and
that the defendants were unwilling to
convene a general meeting of the bank’s
shareholders for the purpose of taking
necessary actions to safeguard the
owners interest as well as subject the
actions of the CBN and its governor to
scrutiny.
Consequently, they prayed the court to
order the defendants to render an
account of their dealings since 2009;
restrain them from selling the bank’s
investments and other assets to Access
Bank, thereby altering the shareholding
structure of the bank in favour of Access
or any other entity. They also asked the
court to order a general meeting of the
bank immediately to consider its accounts;
appoint the president of the Chartered
Institute of Bankers, CIBN, or any other fit
person as may be nominated by the
president of CIBN under the directions of
the court as receiver and manager of the
bank to realise and secure
Intercontinental’s assets pending the
holding of the general meeting.
Three days after, on February 28, the
petitioners filed an ex-parte motion,
asking the court to issue an order of
interim injunction on all the defendants to
the suit to stop the planned sale of
Intercontinental Bank to Access Bank
pending the hearing of the substantive
suit; an order for the substituted service
of the originating and other processes on
the defendants and for such orders the
court may deem fit.
Binta Murtala Nyako, the judge, ordered
that the respondents/defendants be put
on notice. She also granted leave for
substituted service of the suit on the
defendants.
In March last year, five shareholders led
by Sunny Nwosu had sued the bank, the
CBN and its governor, to stop the planned
sale of Intercontinental Bank to any of the
six institutional investors- Standard Bank
of South Africa, First City Monument Bank
PLC, Diamond Bank PLC, First Rand Bank
South Africa, First Bank of Nigeria PLC
and Access Bank PLC – which had shown
interest in taking over the bank.
Okechukwu Okeke, the trial judge, has
adjourned ruling in the suit marked FHC/
CP/1272/09 six times, thus giving Access
Bank the leeway to perfect the
transaction up to the stage of preparing
an MOU.
But a banker dismissed the MOU issue,
saying it is never sacrosanct in the
banking industry. He asked rhetorically:
“What happened to the MOU between
First Bank and Ecobank and between
Lead Merchant Bank and WEMA Bank in
the past?” Newswatch learnt that when
either party examined the books and saw
unacceptable things, they backed out. The
CBN then had to accept the reality. To
him, there are two key issues: is Access’
N50 billion real and whether N50 billion
is enough to bail out Intercontinental
Bank, given all the figures of negative
shareholders fund of N346 billion
bandied about in August 2009 as well as
inter-bank deals of up to N200 billion.
Abdullahi Mohammed, head, corporate
affairs, CBN, said the matter is between
the two banks and that the regulatory
institution would only approve or reject
their decision based on the facts they
present. Segun Fafore, a spokesman for
Access Bank, refused to speak on the
issues raised over his bank’s foray into
Intercontinental Bank.
However, Eddy Ademosu, general
manager and head of corporate affairs
unit of Intercontinental Bank, said the
overriding interest currently is that the
bank needs to recapitalise and that it has
been talking to some investors. “Shortly,
an MOU will be signed and made public,”
he said.

Sanusi's insistence on determining the preferred bidders for the rescued banks creates the impression of ulterior motives on his part. If what he wants really is to recapitalize the banks, then all he should be interested in is setting broad guidelines for the exercise and not choosing those SANUSI is the prime driver of all the transactions, in the Finbank/FCMB merger, Access Bank/Intercontinental,Eko /OCEANIC, etc. In each of these transactions, CBN has been actively arranging, encouraging, discouraging and promoting bids as it pleases! The irony is that it is not even a secret. All over Broad Street and Marina, stories of these goings-on fly openly. Many were puzzled why CBN insists on denying its deep involvement in the process, and more important, why it insists on controlling it.How will access that is indebted 2 inter acquire it with mere 50b and Amcon which bailed out dis bank with over 500b has only 17% stake but sanusi gave his croony Aig 75% stake 4 mere 50b!!.FinBank wit over 180 branches and subsidiary is sold 2 balogun of relatively unknown FCMB 4 merely 6b as against vine capital dat put up a bid of 17b for 55% stake .Hope d national assebly will look into this financial robbery has it promise 2 organise a public hearing on this.
@dancewith pls let continue 2 educate d pple and fight against dis monumental fraud by sanusi and his cohort.

Now AMCON has injected N550b into IBPLC, turned their negative shareholders fund to positive (just as in the case of the nationalized banks) and decided to sell at a rock bottom price of N50b! Thats where everybody has an issue

This rightly sums up what now looks like the biggest banking fraud in Nigerian history!

And where are those "dunce' Accountants, to respond to "above facts"?

Sulad82i, are you actually a trained accountant or one of those ones that bought their Certificate (or asked someone to sit the exam for them! Reminds me of that our Customs Comptroller General!)

Like Fela would say, "Dem turn white into black".
Scumbags!

Anyway, 'The Drama' is still unfolding, even in a compromised environment like Nigeria!

Lastpage

Please let’s get it right. AMCON has not inject equity into these banks. Though, it has the power to do this under the jurisdiction of the CBN, what it has simply done is to acquire eligible bank assets(loans and advance) as stipulated in the AMCON act. I have attached a link to the AMCON 2010 act below for further guidance.

Thank you!

This is very contradictory!

On the one hand, you mentioned that AMCON has not injected equity

On the other hand you mentioned that it has simply acquired the firm's liabilities and asset claims

Simple accounting equation states: Total asset - Total Liabilities = shareholders equity.

Do you mind explaining to us simpletons, how one can acquire assets without acquiring equity?

Please read my comments again. There seems to be a lot of mix-up here as regards the role that AMCON has played in the whole impasse. Each supposedly distressed bank has been treated on a ‘case by case basis’ even those that didn’t fall under the CBN hammer. This is the reason why first and foremost, all banks have been asked to transfer ‘margin loans’ created and utilised during the capital market bubble of 2006-2008 to AMCON for a start.

More so, people tend to mix up the asset-liability concept when it relates to how it is presented on the balance sheet of banks. Banks create assets (loans and advances) as a potential source of income, the big buildings and the flashy cars you see are not assets , they are liabilities because they have to be charged off via ‘depreciation’ against the income statement of banks and they don’t earn any interest. However there are some instances when ‘office space’ within such big buildings can be rented out as with the case of UBA on Marina Street and income generated here is classified as ‘income from extraordinary activities’. Bear in mind that banks are in the business of financial intermediation (sourcing funds from the surplus and making available to areas of deficit whilst making a ‘spread’).

Yet again I connote that, in the case of Intercontinental, non performing loans have been acquired with the intention that they will be recovered. As for the nationalised banks, an equity stake has been acquired to keep them afloat as there were no indications that they would be able to meet the September 2011 deadline. I don’t know how else to explain this again!

Finally, for all those making ‘noise’ that Intercontinental has been ‘short changed’, how many of you would invest now in ICB shares at its current market price?

I wish Deenee would stop confusing issues. The aquisition of bad loans is a separate and concluded transaction. AMCON has spent about 220 billion on that already in intercontinental, to acquire about 340 billion bad loans. In fact, if we add that to the 550 billion they now want to inject before selling for N50 billion, we will be talking about total investment close to N800 billion! Dancewithme has said it all- if Access is buying a bad bank, let them pay N1 for the assets and liabilities and fill the purported N550 hole themselves, otherwise I maintain they are buying a completely restored 330 branch bank for N50 b at taxpayers expense.

More so, people tend to mix up the asset-liability concept when it relates to how it is presented on the balance sheet of banks. Banks create assets (loans and advances) as a potential source of income, the big buildings and the flashy cars you see are not assets , they are liabilities because they have to be charged off via ‘depreciation’ against the income statement of banks and they don’t earn any interest. However there are some instances when ‘office space’ within such big buildings can be rented out as with the case of UBA on Marina Street and income generated here is classified as ‘income from extraordinary activities’. Bear in mind that banks are in the business of financial intermediation (sourcing funds from the surplus and making available to areas of deficit whilst making a ‘spread’)

erhm, uncle denee, pls stop mis-educating people. The big buildings and flashy cars are Assets, not liabilities. They are known as long term assets, and they are depreciated over time by a contra-asset account known as accumulated depreciation.

Yet again I connote that, in the case of Intercontinental, non performing loans have been acquired with the intention that they will be recovered. As for the nationalised banks, an equity stake has been acquired to keep them afloat as there were no indications that they would be able to meet the September 2011 deadline. I don’t know how else to explain this again!

when a Bank's balance sheet falls to negative NAV, it means all it's asset claims will revert to its debt holders (depositors/other lenders) and shareholders have absolutely nothing!!!

AMCON comes in with lots of money, buys up all the bank's liabilities which gives it full ownership to it's assets, AMCON sets up securtized debt instruments, sells them to the market in form of bonds, and informs investors that those bonds will be financed with cash flows from the bank's assets into the future.

when access paid 50 billion for the bank shares (let's assume was bought from existing shareholders), it would be logical to assume that they were buying worthless shares since those shares were not backed by any assets capable of generating cashflows into the future. (those assets now belong to the debt holders --- AMCON in this case)

But then, surprisingly, we find that this is not the case, AMCON has infact given out all it's assets to this Majority stakeholder for free;

The whole arrangement is definitely wishy washy, any smart finance/accounting student shouldn't take too long to discover that.

I am tired  of trying to explaining myself. It looks like a lot of us don’t understand how an M and A transaction works. We keep saying that Intercontinental has been short changed in the whole transaction. How ?, when they have negative shareholders’ funds at the point that the whole deal  was originated? Whilst structuring a merger or acquisition, the market capitalization of the company to be acquired is used. What was the market capitalization of Intercontinental as at when the transaction implementation process was agreed? Market capitalization (often  called ‘market cap’) is a measurement of the size of a business enterprise (corporation) equal to the share price times the number of shares outstanding (shares that have been authorized, issued, and purchased by investors) of a publicly traded company. As owning stock represents ownership of the company, including all its equity, capitalization could represent the public opinion of a company's net worth and is a determining factor in some forms of stock valuation.

As we speak, Intercontinental has the largest number of authorized shares in issuance alongside Bank PHB and Oceanic and currently trading at rock bottom prices (in fact, I think trading has been suspended because of the 'deal in progress'). Are we quick to forget that these banks were amongst those that came to the market to raise additional capital even when they didn’t need it? Have we forgotten the period when some of these banks were involved in the ‘my balance sheet size is bigger than yours fiasco’ that eventually led to reckless corporate management practices and how branches sprung up in every ‘nook and cranny’ even when there was no business/strategic justification for their existence? We keep saying that Intercontinental , Oceanic et al. have a huge branch network. My question is how many are actually posting  profit?  Most of these branches are ‘dead weight’ and just cost centers!

Once again, the 550 billion that AMCON has plugged into Intercontinental  to fill a ‘big hole’  is not equity.  It is the book value of non-performing loans that they have been carrying in their books which we all know is determined by the market value of the shares as they are traded on the exchange. To shed more light on this, the loans in a strict sense were worth  much more than this. Are we quick to forget that Intercontinental singled handedly gave out margin loans to ‘one individual’  using several legal entities as ‘proxies’  and to the tune of about 400 billion naira, which was used to buy back their own shares from the capital market and create the ‘impression’ that there was ‘real’ demand for these stocks. Thus driving prices up just before their last ‘hybrid offer’. This is further exacerbated by the fact that such loans didn’t have a strong ‘collateral base’ and were just backed up through the securitization and domiciliation of share certificates with the obligor (Intercontinental in this case). I am sure that a lot will agree such share certificates are worth nothing now. What AMCON simply did was to determine the current market of the various tranche of NPLs and they acquired them at a fair value. If we are to go by the 2006-2008 prices, those loans were worth over 2.3 trillion as at when they were structured!

Please let’s not be stuck in the simplistic assumptions that form the central theme of the balance sheet equation. What about the ‘contingent liabilities’ that are treated as ‘off balance sheet items’ and not  included in the BL equation?  I would ask this question once again; would you as an investor buy into such a corporation with a ‘big hole’ (whose breadth and depth has not been fully determined till date) without the assurance from CBN via AMCON that the recovery of the NPLs will be guaranteed? What Access paid which is around 50billion is the current ‘market cap’ of their stake in Intercontinental (as defined above). Once the TIA is successful,  new stocks will be issued to the shareholders of the ‘merged entity’. The sad thing is that Access bank shareholders would probably get more of a ‘fair deal’ than those of Intercontinental!

Thank you!

deenee:

I am tired  of trying to explaining myself. It looks like a lot of us don’t understand how an M and A transaction works. We keep saying that Intercontinental has been short changed in the whole transaction. How ?, when they have negative shareholders’ funds at the point that the whole deal  was originated? Whilst structuring a merger or acquisition, the market capitalization of the company to be acquired is used. What was the market capitalization of Intercontinental as at when the transaction implementation process was agreed? Market capitalization (often  called ‘market cap’) is a measurement of the size of a business enterprise (corporation) equal to the share price times the number of shares outstanding (shares that have been authorized, issued, and purchased by investors) of a publicly traded company. As owning stock represents ownership of the company, including all its equity, capitalization could represent the public opinion of a company's net worth and is a determining factor in some forms of stock valuation.

As we speak, Intercontinental has the largest number of authorized shares in issuance alongside Bank PHB and Oceanic and currently trading at rock bottom price (in fact, I think trading has been suspended because of the 'deal in progress'). Are we quick to forget that these banks were amongst those that came to the market to raise additional capital even when they didn’t need it? Have we forgotten the period when some of these banks were involved in the ‘my balance sheet size is bigger than yours fiasco’ that eventually led to reckless corporate management practices and how branches sprung up in every ‘nook and cranny’ even when there was no business/strategic justification for their existence? We keep saying that Intercontinental , Oceanic et al. have a huge branch network. My question is how many are actually posting  profit?  Most of these branches are ‘dead weight’ and just cost centers!

Once again, the 550 billion that AMCON has plugged into Intercontinental  to fill a ‘big hole’ as is not equity.  It is the book value of non-performing loans that they have been carrying in their books which we all know is determined by the market value of the shares as they are traded on the exchange. To shed more light on this, the loans in a strict sense were worth  much more than this. Are we quick to forget that Intercontinental singled handedly gave out margin loans to ‘one individual’  using several legal entities as ‘proxies’  and to the tune of about 400 billion naira, which was used to buy back their own shares from the capital market and create the ‘impression’ that there was ‘real’ demand for these stocks. Thus driving prices up just before their last ‘hybrid offer’. This is further exacerbated by the fact that such loans didn’t have a strong ‘collateral base’ and were just backed up through the securitization and domiciliation of share certificates with the obligor (Intercontinental in this case). I am sure that a lot will agree such share certificates are worth nothing now. What AMCON simply did was to determine the current market of the various tranche of NPLs and they acquired them at a fair value. If we are to go by the 2006-2008 prices, those loans were worth over 2.3 trillion as at when they were structured!

Please let’s not be stuck in the simplistic assumptions that form the central theme of the balance sheet equation. What about the ‘contingent liabilities’ that are treated as ‘off balance sheet items’ and not  included in the BL equation?  I would ask this question once again; would you as an investor buy into such a corporation with a ‘big hole’ (whose breadth and depth has not been fully determined till date) without the assurance from CBN via AMCON that the recovery of the NPLs will be guaranteed? What Access paid which is around 50billion is the current ‘market cap’ of their stake in Intercontinental (as defined above). Once the TIA is successful,  new stocks will be issued to the shareholders of the ‘merged entity’. The sad thing is that Access bank shareholders would probably get more of a ‘fair deal’ than those of Intercontinental!

Thank you!

Obviously you don't get it, do you? This is simpler than you are trying to struggle with. Let me brake it down in details so you can understand as I can see its either you don't understand simple accounting or you chose not to, for whatever reason.

The N550b AMCON paid in has restored Intercontinental bank to a state of zero shareholders fund. They were taken over because they had high NPL. Before the take over, they had shareholders fund in excess of N150b. When CBN took over, they were forced to provision for their high non performing loans (NPL) to the tune of N500b. This money was forcefully taken from their capital account which automatically took them from having a shareholders funds of +150b to a negative shareholders fund of about N400b.

With the AMCON funds, they are now back to positive shareholders fund or capital base and therefore does not need Access bank. if AMCON claims they are not in the business of banking and desires to sell intercontinental (which as you can see rightfully belongs to them and by extension all Nigerians), then they are bound by ethics and morals to sell at a fair value.

Now do you consider selling Access, with over 300 branches, some 12,000 human capital, sophisticated IT infrastructures, landed assets all over the country and a deposit base in excess of N700b at a price of N50b fair?

I make bold to say that their buildings in Lagos alone is worth more than N50b, not to talk about those in Abuja (Mind you they are many there), PH and all over the country.

it still can be as simple as that!!

What you  guys are basically saying is that, this straight forward obvious fraud is happening and no one has raised an eyebrow since its announcement?


The Senate committee didnt see anything wrong?
The economist/professors didnt see anything wrong
The Accountants wont blow the whistle?

or have they been paid by the northerners to keep shhh as well?

The only people that see the very obvious biggest fraud of the century are Expert on the most progressive online Forum out of Nigeria

I give up, there is no point engaging in any form of discourse on this matter again. See links below from Bloomberg showing Intercontinental Bank market cap

What building? , didn’t Allstates, SGBN, Liberty, Spring and Citizens bank (s) have buildings?

The current market cap is a 'mere' N13.2 billion for the whole 'shares' even with the so called 'equity' that you claim that AMCON has injected. Mind you, that shareholder funds’ is determined by the current market price of the stocks traded on the exchange. The prevailing price is 0.70kobo and they have about 18.9 billion authorized shares in issuance. Multiply the price by the shares in issuance to get the capitalization.

May God open our eyes of understanding!






http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=INTERCON:NL
http://investing.businessweek.com/research/stocks/charts/charts.asp?ticker=INTERCON:NL

deenee:

I give up, there is no point engaging in any form of discourse on this matter again. See links below from Bloomberg showing Intercontinental Bank market cap

What building? , didn’t Allstates, SGBN, Liberty, Spring and Citizens bank (s) have buildings?

The current market cap is a 'mere' N13.2 billion for the whole 'shares' even with the so called 'equity' that you claim that AMCON has injected. Mind you, that shareholder funds’ is determined by the current market price of the stocks traded on the exchange. The prevailing price is 0.70kobo and they have about 18.9 billion authorized shares in issuance. Multiply the price by the shares in issuance to get the capitalization.

May God open our eyes of understanding!






http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=INTERCON:NL
http://investing.businessweek.com/research/stocks/charts/charts.asp?ticker=INTERCON:NL

your arguments defiles simple logic. It does not matter how much uneccessary sophistication you put in your explanation, it is still no brainer for anyone to argue that this deal is not fraudulent. Your argument would have been valid if AMCON did not pump in money into the bank before dashing it to Access bank. If AMCON could come up with as much as 550billion naira, what stopped them from providing the pittance from Access bank. Unless the authorities are trying to give somebody the ownership of that bank on platter, the whole deal is shoddy. If the claim was that they did not want to get involved with the running of the banks then how come they did not exercise thesame restraint when it came to Bank phb, Afribank and spring bank. 50billion naira for a rescued bank and you want to go into uneccessary explanation, what an attempt.

deenee:

I give up, there is no point engaging in any form of discourse on this matter again. See links below from Bloomberg showing Intercontinental Bank market cap

What building? , didn’t Allstates, SGBN, Liberty, Spring and Citizens bank (s) have buildings?

The current market cap is a 'mere' N13.2 billion for the whole 'shares' even with the so called 'equity' that you claim that AMCON has injected. Mind you, that shareholder funds’ is determined by the current market price of the stocks traded on the exchange. The prevailing price is 0.70kobo and they have about 18.9 billion authorized shares in issuance. Multiply the price by the shares in issuance to get the capitalization.

May God open our eyes of understanding!






http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=INTERCON:NL
http://investing.businessweek.com/research/stocks/charts/charts.asp?ticker=INTERCON:NL

your arguments defiles simple logic. It does not matter how much uneccessary sophistication you put in your explanation, it is still no brainer for anyone to argue that this deal is not fraudulent. Your argument would have been valid if AMCON did not pump in money into the bank before dashing it to Access bank. If AMCON could come up with as much as 550billion naira, what stopped them from providing the pittance from Access bank. Unless the authorities are trying to give somebody the ownership of that bank on platter, the whole deal is shoddy. If the claim was that they did not want to get involved with the running of the banks then how come they did not exercise thesame restraint when it came to Bank phb, Afribank and spring bank. 50billion naira for a rescued bank and you want to go into uneccessary explanation, what an attempt.

It’s seriously not worth the effort trying to explain to folks here about what or what not of this article. Majority of the responses are from people whom i guess have not graduated from Uni or studied a little bit of accounting or did not study accounting at all or studied finance or someone who is just opportune to work in a bank but claims to be an accountant. Most of them don’t really know who they are, in honesty and can’t make sense of things. Funny how most of them think Bankers are Accountants.

What i find funny is the the conclusiong they are drawing from scanty information, theyve already made up their minds before anything, classing amcon as some sort of investor

I mean all the business papers in nigeria havent been as smart as they are or been bought over i guess- by now the accountants and auditiors in nigeria should have spoken out abi they got the gist proper