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‘Diamond Bank gets cash offer from investor’

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…as financier wants Dozie to step down

Diamond Bank Plc has received an offer from a major investor to inject cash by increasing its stake, a move that would help the Tier 2 lender keep its Capital Adequacy Ratio (CAR) above the required threshold, Bloomberg reported yesterday citing remarks by the bank’s outgoing chairman, Mr. Seyi Bickersteth .
He was reported as saying that the proposal was on condition that Chief Executive Officer, Diamond Bank, Uzoma Dozie resigns.
While Bickersteth did not name the shareholder, Diamond Bank’s biggest investor is U.S. private equity firm Carlyle Group LP, which, according to the news agency declined to comment.
Capital requirements became a concern for many Nigerian banks in 2016 after a contraction in the economy caused by an oil-price slump triggered a surge in Non-Performing Loans (NPLs). Standard & Poor’s (S&P) yesterday cut Diamond Bank’s rating to CCC+/C from B-/B, citing pressure on capital and foreign-currency liquidity.
Diamond has also discussed selling itself to a larger rival, but this plan was eventually rejected after a boardroom vote, Bickersteth, who declined to identify the potential acquirer, was reported as saying.
“The majority of us voted against” the takeover, he was quoted as saying. “The bank cannot be pushed into the hands of one suitor,” if it intends to get the best value for shareholders.
Meanwhile, Bickersteth is reportedly challenging an announcement by the bank that he’s no longer chairman. According to Bloomberg, he initially quit alongside three other non-executive directors in a walkout last month, only to rescind his resignation and vote on the proposed takeover proposal. Nevertheless, Diamond announced his departure on Oct. 25.
The lender has announced plans to dispose of its U.K. subsidiary, which would follow the sale of four divisions elsewhere in West Africa. That would leave it as a purely Nigerian company, meaning it could qualify for a national license that would reduce its minimum capital adequacy ratio to 10 percent from 15 percent.

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