Nigeria: Skye Bank pays 20% deposit for Mainstreet Bank purchase

Oct 14, 2014

Skye Bank Plc has paid a 20 per cent deposit for the purchase of Mainstreet Bank, after signing an agreement to buy 100 per cent of the bank from the Asset Management Corporation of Nigeria (AMCON).

Skye Bank Plc has paid a 20 per cent deposit for the purchase of Mainstreet Bank, after signing an agreement to buy 100 per cent of the bank from the Asset Management Corporation of Nigeria (AMCON).


The bank has also confirmed its ability to meet the remaining financial commitment within the agreed time frame.

However, sources close to the deal expressed concerns that even if the bank succeeded in raising the money it plans to raise before year end, it might not be enough to comfortably fund the deal.

Nigerian Tribune investigations reveal that the disclosed deal price is N120 billion (€574.4 million).

"If we assume that Skye Bank successfully raises the $100 million in tier 2 capital it was looking to close before year-end, its capital buffer only funds 34 per cent of the deal price. Thus, given the size of the deal and the apparently low organic capital available to Skye to fund it, we would look for some clarity from management on the funding structure," the sources said.ADNFCR-2976-ID-801754096-ADNFCR