Titan Trust Bank (TTB) obtained $300 million from African Export Import Bank (Afreximbank) to acquire Union Bank Nigeria. The financial backing will see Titan Trust leverage on the acquisition to provide capital for intra-African trade.
Why Afreximbank back Titan Trust Bank?
Afreximbank provided the $300 million, which is described as an Intra-African Investment Financing Facility, to improve the support African traders receive from financial markets for the African Continental Free Trade Area (AcFTA).
With the deal between Afreximbank and Titan Trust Bank, which enabled the latter to acquire 95.41% of UBN, a $3 billion financing medium term will be disbursed by TTB, as the acquisition will grant the firm access to Union Bank’s capital base.
What Afreximbank is saying
“Afreximbank’s financial support enables TTB to secure the acquisition of a well-capitalised bank with an extensive network, enabling the entity to better serve vital economic activities of the public sector, companies, and small and medium-sized enterprises.” a statement from Afreximbank’s media liaison, Amadou Sall, on Monday, disclosed.
It explained “The development impact of the acquisition is immense as TTB will leverage the merged entity to provide financing of about three billion dollars over the medium term of which over 600 million dollars will directly support intra-regional trade finance.’’
Meanwhile, the President and Chairman of the Board of Directors of Afreximbank, Benedict Oramah, said deals like that of his firm and TTB, will fill the gap foreign investors is leaving, as they exit Africa’s market.
“As international capital retreats from Africa, we must redouble our efforts to build an effective and resilient financial services sector on the continent committed to intra-African trade and investments and the development of regional value chains.
“Afreximbank is confident that the transaction will engender confidence in the Nigerian financial system and attract additional capital investments.It would also support the financial inclusion of small-scale enterprises, women-led businesses, youth enterprises and start-ups which are critical to the successful implementation of the AfCFTA.” Oramah said.