…Unity Bank bid dropped as president tries to lure investors
APRIL 3, 2018 – It looked like a done deal between a Nigerian bank in need of funding and a U.S. private-equity firm keen to stump up the cash. But even after documents were signed it fell apart, showing how tough the African nation can be for investors.
Milost Global Inc. said it penned an agreement in November to provide $1 billion of financing that would’ve given it 60 percent of Unity Bank Plc. Milost has now backed off, citing an unidentified “politically connected” shareholder who threatened the investor’s Nigerian interests if it pursues the deal. The Lagos-based lender has denied that the documents were binding and said it had nothing to do with the threats.
The transaction failed as President Muhammadu Buhari wants to make it easier for businesses to operate in Africa’s most populous nation, which ranks 145th out of 190 countries in the World Bank’s ease of Doing Business index.
“The message we get from clients is that even though the Nigerian government is outwardly pro-investment, in practice foreign investors don’t always receive a warm welcome,” said Matthew Kindinger, an analyst at Washington-based Frontier Strategy Group, which advises multinational companies in emerging markets. “Nigeria is a very challenging environment. You get a lot of problems that you wouldn’t elsewhere.”
