Tension as Nedbank Moves to Raise Stake in Ecobank

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nedbankThe move by South Africa’s Nedbank Group to increase its stake in Ecobank Transnational Incorporated (ETI) is causing anxiety in the market. Nedbank already owns a stake in ETI.
The concern arises from two convertible loans which ETI’s subsidiary, Ecobank Nigeria Plc, took from Nedbank and Public Investment Corporation (PIC), a South African pension fund that has considerable interest in Nedbank.

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THISDAY gathered that in order to finance its acquisition of former Oceanic Bank Plc, Ecobank Nigeria, through its parent company, ETI, had secured a convertible loan of $250 million from Nedbank of South Africa. ETI also took another $250 million convertible loan from PIC.

Although the agreement on the loans included a non-controlling clause, which prevents Nedbank and PIC from and taking over controlling interest in the pan-African bank through a debt-equity swap, THISDAY learnt that Nedbank is exploring the possibility of combining with PIC to take up a stake in ETI.

It was further gathered that the window available to Nedbank and PIC to convert their loans into equity is between November 2013 and November 2014.

Should both Nedbank and PIC convert the loan into equity, the South African bank will acquire up to 20 per cent of the pan-African bank and PIC follows suit, both firms could end up with a direct and indirect stake of 51 per cent of ETI.

THISDAY also learnt that Mr. Kolapo Lawson, who recently stepped down as the chairman of Ecobank, had fought against the move by the South African bank and its principle shareholder PIC.
In fact, the source alleged that Lawson’s refusal to endorse the deal could be responsible for the allegations levelled against him.

Babatunde Akinsola
Babatunde Akinsolahttps://naija247news.com
Babatunde Akinsola is aNaija247news' Southwest editor. He's based in Lagos and writes on the Yoruba Nation political issues, news and investigative reports

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