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Unity Bank Plc Milost terminates investment deal, files $500m suit against Business Day Newspaper

Milost says it will continue to do business in Nigeria despite any negative publicity

  • Published:
Milost terminates Unity Bank deal, sues against Business Day play

Kim Freeman, Managing Partner & CEO of Milost

(LinkedIn/Kim Freeman)

Milost Global Inc., a New York-based private equity firm has announced the termination of its proposed $1billion investment in Unity Bank Plc, after receiving threats.

The private equity said in a statement released via GlobeNewswire on Monday said that termination of the deal came as a result of threat messages the company received from a 'well connected' politician since an initial announcement of the deal broke out last week.

"The said individual was very well informed about our dealings with Unity Bank such that he knew the audit group Milost had hired to carry out the final due diligence. He told Milost to tell the board of Unity Bank that the audit firm had instructed Milost that Unity Bank was a bad investment, failing which he would unleash the media on Milost using among other things accusations that would cause the government to send Milost packing. These threatening emails were shared with the CEO of Unity Bank and the then CFO Ebenezer Kawole.

"Following these emails, negative articles by Business Day Nigeria started appearing accusing Milost of operating a pump and dump operation. At that point Milost realised that the original threats had begun to materialise, because, after that first Business Day article on its alleged pump and dump, another email was received confirming that it’s the work of the blackmailer,” Milost said.

The company said it is filing a $500 million lawsuit against Business Day Nigeria and the journalists before the end of the week for repeated 'unprofessional conduct'.

Although Unity Bank Plc had released a statement last week saying there is "No Investment of $1 billion yet and we have not reached any agreement with Milost Global Inc. to warrant such speculation," but Kim Freeman, Managing Partner & CEO of Milost, in the statement maintained that his team and the commercial bank officials have had series of meetings on the investment deal.

According to the statement, on August 7, 2017, Milost Global received a request for a call with the CEO and CFO of Unity Bank Plc, adding that on the call, Unity Bank expressed its interest in working with Milost Global as its funding partner for its growth plans in Nigeria.

Freeman explained further: “Following the call, a desk top due diligence was conducted by Milost to its satisfaction. On September 4, 2017, a $1billion financing term sheet was fully executed by both Milost and Unity Bank.

“The facility, a combo of equity and debt, was provided on the exciting understanding that Unity Bank would delist on the Nigerian Stock Exchange and move its listing to the USA. The signed term sheet was approved by the board of Unity Bank.

“On Monday, October 23, 2017, at 11:05 EST, Milost Global Inc. was visited by Mrs Oluwatomi Somefun, the CEO of Unity Bank Plc, at its New York Offices. The meeting was scheduled for 11:00 am EST and it went ahead as planned.

“The meeting was attended by Milost Global Inc. analysts and the Chairman, Mr Egerton Forster. At the meeting, she explained the need for capital funding at the bank and also their expansion plans. It was then agreed that Milost Global Inc. would start further due diligence on Unity Bank.

“It is normal practise for all the publicly quoted companies which we fund to notify the market regulator on signature of the commitment letter since it has material effect to the stock; however, Unity Bank did not. Milost assumed that this did not happen because Unity had agreed to move its listing to the USA.”

He said Milost will continue to do business in Nigeria despite any negative publicity and this will ultimately benefit Nigeria and Africa. Milost Global Inc. has analysed all its facts on the table and decided to terminate the Unity Bank transaction and the termination letter was sent to the bank this morning.

In January 2018, Milost Global in conjunction with Isilo Capital Partners (African subsidiary) acquired the entire stake in Primewaterview Holdings Nigeria Limited, at $1 billion.

Also in February 2018, the private equity firm signed a $350 million financing agreement Japaul Oil and Maritime Services Plc. The finance is expected to be injected into the company, with a focus on its mining operations.

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