Nigeria's AMCON to take over bank bailout

funds

 How Nigerian 'bad bank' will value bad loans
Nov 8, 2010
 Nigerian "bad bank" set to absorb $15 bln bad loans
Nov 8, 2010
 Nigerian bad bank set to absorb $15 bln bad loans
Nov 8, 2010
 Nigerian Senate approves board of state "bad bank"
Nov 3, 2010
 Nigerian Senate approves board of state bad bank
Nov 3, 2010
 Nigeria cbank says deal talks near on rescued lenders
Oct 14, 2010

Nov 9 (Reuters) - Nigeria's new "bad bank" will take over the loans
given by the central bank to nine lenders in a $4 billion bailout last
year by converting them into some form of equity, its chief executive
said on Tuesday.
The Asset Management Company of Nigeria (AMCON) was established to soak up bad bank loans
and help recapitalise the nine institutions rescued last year, in an effort to restore lending in sub-
Saharan Africa's second biggest economy.
After its maiden board meeting on Monday, AMCON said it had approval to absorb 2.2 trillion naira
($15 billion) of bad loans from the rescued lenders and margin loans from the wider banking sector.
[ID:nLDE6A72EQ]
AMCON chief executive Mustafa Chike-Obi said most of the banks rescued last year would require
further funds to get them to minimum capital adequacy levels even after AMCON had absorbed non-
performing loans and returned shareholders' funds to zero.
"Part of their negative capital is the debt, or the loans, that the central bank has advanced to them,"
Chike-Obi told CNBC Africa television.
"It is expected that AMCON will in some form assume those loans either as equity or as preferred
shares ... and take it over from the central bank," he said.
He said the 2.2 trillion naira was a face value for the bad loans AMCON could absorb but it would
buy them at a discount. He estimated half of the total was margin loans and half other non-
performing loans, of which 10-20 percent were unsecured.
AMCON will value non-performing loans backed by shares at a premium of around 60 percent to
recent prices. Unsecured loans will be valued at five percent of principal. [ID:nLDE6A72FK]
Chike-Obi said AMCON did not plan to sell any of the shares it buys from distressed banks in the
immediate future.
"When AMCON decides to sell it will be announced ... the current thinking is that AMCON will be
holding assets it acquires for at least two years," he told CNBC Africa. (For full Reuters Africa
coverage and to have your say on the top issues, visit: af.reuters.com/ ) (Reporting by Chijioke
Ohuocha and Nick Tattersall; Editing by Ron Askew)

Tuesday, November 9, 2010 4:01 PM EST

Nigeria's AMCON to take over bank bailout funds
 Nigeria's new "bad bank" will take over the loans given by the central bank to nine
lenders in a $4 billion bailout last year by converting them into some form of
equity, its chief executive said on Tuesday.

The Asset Management Company of Nigeria (AMCON) was established to soak

up bad bank loans and help recapitalise the nine institutions rescued last year, in an
effort to restore lending in sub-Saharan Africa's second biggest economy.

After its maiden board meeting on Monday, AMCON said it had approval to
absorb 2.2 trillion naira of bad loans from the rescued lenders and margin loans
from the wider banking sector.

AMCON chief executive Mustafa Chike-Obi said most of the banks rescued last
year would require further funds to get them to minimum capital adequacy levels
even after AMCON had absorbed non-performing loans and returned shareholders'
funds to zero.

"Part of their negative capital is the debt, or the loans, that the central bank has
advanced to them," Chike-Obi told CNBC Africa television.

"It is expected that AMCON will in some form assume those loans either as equity
or as preferred shares ... and take it over from the central bank," he said.

He said the 2.2 trillion naira was a face value for the bad loans AMCON could
absorb but it would buy them at a discount. He estimated half of the total was
margin loans and half other non-performing loans, of which 10-20 percent were
unsecured.

AMCON will value non-performing loans backed by shares at a premium of

around 60 percent to recent prices. Unsecured loans will be valued at five percent
of principal.

Chike-Obi said AMCON did not plan to sell any of the shares it buys from
distressed banks in the immediate future.

"When AMCON decides to sell it will be announced ... the current thinking is that
AMCON will be holding assets it acquires for at least two years," he told CNBC
Africa.