The transaction is still subject to a due diligence as well as regulatory approvals
The New York-based firm, Milost Global Inc. is planning to raise as much as 1 billion dollars to refinance Unity Bank Plc, sources familiar with the discussion told Bloomberg.
Milost Global Inc. is an American Private Equity firm that is headquartered in New York City, with more than $25 billion in committed capital.
A source told Bloomberg that Milost offered to invest $700 million in equity and $300 million in five-year bonds that can be converted into shares in the Nigerian lender to get an initial stake of about 20 percent for its first equity investment of $250 million.
The transaction is still subject to a due diligence as well as regulatory approvals.
The American private equity firm had in January acquired Primewaterview Holdings Nigeria Limited for $1 billion. Primewaterview is a diversified holding company with a portfolio of Real Estate, Oil & Gas, Quarry Mining, Healthcare and Power.
The company also signed a $350 million financing agreement with Japaul Oil and a deal to invest $250 million in Resort Savings & Loans, a financial services company.
Recently, Milost Global executives toured Nigeria for a week where the management concluded the Resort Savings’ commitment.
Omotola Abimbola, a banking analyst at Lagos-based Afrinvest West Africa, said Milost’s interest is positive for Unity Bank because it will support the company’s capital base, making it possible for the bank “to be able to grow loans.”
“For an investor to say they’re putting their money into the bank, it shows they have a turnaround plan.”
Net income at Unity Bank slid by almost 54 percent to N2.18bn ($6.1m) in the 12 months through December 2016, with assets of N493bn, according to the company’s latest annual report.
Tomi Somefun, the MD/CEO of Unity Bank Plc, had noted that “economic headwinds stifled business growth during the period accompanied by increased inflation and foreign exchange liquidity.