The proposed acquisition of FinBank by First City Monument Bank (FCMB) has suffered a major setback, following the recent discovery of hidden bad loans and huge debt profile of the troubled bank.
A senior official of the Securities and Exchange Commission (SEC), who did not want his name published, said that debt issue was responsible for the delay in approving the two months old take-over bid.
“Finbank has numerous issues, especially bad loans that need to be addressed,” he said, adding that the bank had hidden and questionable transactions that need to be resolved.
He said stakeholders in the take-over bid, especially the SEC, had agreed on finding a solution to the debt overhang in Finbank before the endorsement of the banks’ business combination.
Responding, Kenny Aliu, FCMB Group Head, Corporate Communications, said that things were going according to plans in terms of timing of completing the transaction.
“We like doing things thoroughly,” he said. “Currently we are going over the final details of the transaction. In our view, the transaction is seamless and everything is on track as far as our relationship with all relevant regulators is concerned. Everything is going on track; there is no cause for concern. We are not aware of any setback. It has not been communicated to us.”
The shareholders of FCMB, had on September 29, approved the bank’s acquisition of Finbank through its subsidiary, FCMB Investments Ltd.