Milost Global Inc. has ended talks to provide $1 billion to Nigeria’s Unity Bank Plc, saying it received threats that it will be run out of the country if the deal continues.
The New York-based private-equity firm had agreed to provide debt and equity on the understanding that Unity would delist in Nigeria to have its stock traded in the U.S., Milost said in an emailed statement on Monday.
The term sheet was signed and approved by the board of Unity, which needed the capital to strengthen its balance sheet and to expand, the firm said. It would ultimately have acquired 60 percent in the Lagos-based bank.
However, there firm alleged that shortly after news of the deal broke on Bloomberg, “Milost started receiving threatening emails from a gentleman who says he is politically connected to the powers that could shut Milost out of Nigeria if Milost didn’t terminate the Unity Bank transaction.”
It claimed that negative articles started appearing in the local press and last week, Unity issued a “false statement which denied signing a binding commitment agreement,” Milost said.
The firm said it will file a lawsuit against BusinessDay Nigeria for publishing what it said was false information. Anthony Osae-Brown, the editor for BusinessDay, said he couldn’t immediately comment when contacted by email.
Unity Bank didn’t immediately respond to requests for comment, saying it will respond later. Isaac Okorafor, a spokesman for the Central Bank of Nigeria, said he was not in a position to comment when contacted by phone.
Sewa Wusu, an analyst for SCM Capital in Lagos, said by phone that “Transparency is important in a negotiation and information should be well managed” to ensure the parties involved in talks meet their objectives.
He stressed that: “Unity Bank needs capital.”
Unity, which was formed out of the merger of nine banks between December 2005 and March 2006, said in April last year that it is in talks to sell its non-performing loans to avoid penalties after missing a regulatory deadline to file its recapitalization plans. Shares in the company slumped 4.4 percent to 1.29 naira in Lagos trading.
