Ecobank Transnational Incorporated Plc has scrapped the sale of part of its Nigerian business because falling market values mean it wouldn’t get a good enough price, the Chief Executive Officer, Mr. Ade Ayeyemi, said on Tuesday.
“The market is not right for us to be selling part of that unit,” Ayeyemi, who was appointed as ETI CEO last month after quitting as Citigroup Incorporated’s CEO for sub-Saharan Africa, said in an interview in London, Bloomberg News reported.
“We will not be doing any dilution at the moment. You cannot sell an asset you don’t have to sell at the time when market prices are at the bottom of the trough.”
Ayeyemi’s predecessor Albert Essien said in June the lender would sell a stake in Ecobank Nigeria Limited by the end of 2015 to boost the unit’s capital. This was planned because the Central Bank of Nigeria raised minimum capital thresholds.
Ecobank’s shares have fallen 12 per cent in Lagos, since the end of June, amid concern among investors that a slowdown in China, sub-Saharan Africa’s biggest trading partner, and a looming rise in United States’ interest rates may weigh on economic growth. Togo-based Ecobank operates in 36 African countries, more than any other lender.
Ecobank was considering raising as much as $400m with a sale of up to 25 per cent of the Nigerian subsidiary, Arqaam Capital Limited said in a September note.
“We are adequately capitalised at the moment,” Ayeyemi said. “If there are business opportunities that require us to have more capital, we will support that. We always have the option in future.”
Prior to the decision not to sell the stake in the unit, Ecobank Transnational Incorporate secured a $285m senior unsecured loan facility from Deutsche Bank AB.
The pan-African lender had notified the Nigerian Stock Exchange late in September that it had received the one-year senior unsecured loan facility.
The Exchange said Ecobank notified it that it had appointed Deutsche Bank to be the initial mandated lead arranger, book-runner and facility agent, together with a syndicate of international banks to arrange the financing.
“Deutsche Bank has successfully closed primary syndication with an over-subscribed order book. The final size of the facility was maintained at $285,000,000,” the Exchange said.
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Source : Punch