September 12, 2011 / 4:57 PM / 7 years ago

ETI to buy 100 pct of rescued Nigerian lender Oceanic Bank

LAGOS, Sept 12 (Reuters) - Nigeria’s Oceanic Bank said on Monday it will transfer 100 percent of its share capital to pan-African lender Ecobank Transnational Incorporated (ETI) and merge its operations with ETI’s local unit in a bid to recapitalize ahead of a central bank September deadline.

Oceanic said ETI will pay 38.5 billion naira ($24m million) worth of its ordinary shares and 16.5 billion naira in preference shares for total control of the rescued lender. It said the shares will be paid to existing shareholders and a state-owned asset management company AMCON, without stating in what proportion.

Oceanic will hold a shareholder meeting on Sept. 27 to approve the deal.

“ETI will own 100 percent of the share capital of Oceanic Bank, while existing shareholders of Oceanic and AMCON will become shareholders in ETI. Subsequent to this, ETI will merge Oceanic Bank with Ecobank Nigeria,” the rescued lender said in a statement.

Under the deal, holders of rescued lender Oceanic Bank will get one ordinary share and 0.428 preference share of ETI for every 20 Oceanic shares held on Oct. 4, 2011. Oceanic will subsequently be delisted from the Nigerian Stock Exchange.

AMCON was set up last year to absorb non-performing loans from nine rescued lenders including Oceanic in exchange for government bonds, making them attractive for new investors to recapitalize them.

Oceanic and ETI subsequently signed a merger agreement in July, paving the way for the rescued lender to be recapitalized, in what shareholders’ hope will draw a line under Oceanic’s crisis.

Oceanic is the fourth lender to reveal details of its recapitalization plans. ($1 = 155.350 Nigerian Nairas) (Reporting by Oludare Mayowa; Writing by Chijioke Ohuocha; Editing by Hans-Juergen Peters)

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