Afribank calls off deal with Vine capital

Afribank PLC has called off deal talks with Vine Capital over doubts that the private equity firm has the ability to raise the necessary funds to recapitalize the bank, banking sources has disclosed. It was gathered that some directors of the bank may have resigned following disagreement with the apex bank over choice of partner for the bank. Afribank signed memorandum of understanding with private equity firm Vine Capital in May to begin acquisition negotiations and exchange information before proceeding to having a take-over agreement in place.
“The technical competence of the equity firm and its ability to run a bank is in doubt,” a CBN source said, adding that the bank will require at least $160 million to recapitalize. Banking sources said the reserved bidder, Fidelity Bank may be asked to step in.
The CBN had stopped Vine Capital’s acquisition of Afribank, one of the eight banks rescued in 2009, to protect financial system stability. The central bank has given the rescued banks until September to find new investors or accept funds from state-owned asset management company AMCON or face nationalization or liquidation.