Milost Global Inc-an American private equity firm, has appointed a Nigerian escrow agent and placed funds in escrow account to back up its investment in Resort Savings & Loans Plc.
Milost had indicated it plans to invest $250 million, about N76.5 billion, on Resort Savings & Loans. Milost, combining its traditional equity and debt approach, will be staking $100 million as equity capital and $150 million as debt capital.
Milost Global and Resort Savings had signed a commitment letter, giving the private equity firm the mandate to proceed with due diligence and other regulatory issues. The board of Resort Savings had also approved the proposed transaction at its meeting on February 26, 2018.
In an update filed at the Nigerian Stock Exchange (NSE) yesterday, the board of Resort Savings stated that Milost and Resort have signed a binding agreement and first drawdown agreement of $10 million with a provision for immediate release of $1 million.
The board of the mortgage bank noted that it has received assurances from both the local and foreign investors on the readiness to turn around the mortgage bank.
“In this regard, we have assurances that the funds which are already escrowed shall be released as per our agreed term sheet. It is not in the interest of anybody that the funds are kept idle any further,” the board stated.
The company pointed out that the release of the fund is being delayed by the technical suspension on its shares, which has prevented market valuation of the shares, a part of the overall valuation for the transaction.
Resort Savings assured that it is taking necessary steps to meet all regulatory requirements that will lead to the lifting of suspension on its share price and clearance of the investment deal.
Earlier, the board of Resort Savings had indicated that the acquisition by Milost will be executed in phases through private placement to Milost Global and another local investor, which is currently undergoing approval process at the apex bank.
“It is the belief of the board and management that the proposed investment will assist the bank in no small way in recapitalising the business, growing capacity and in becoming the leader in the mortgage finance industry. With this, we expect to be able to deliver impressive returns to our shareholders and satisfy the expectations of our other stakeholders in the very near future,” the board stated.
The Nation had reported that Milost Global is seeking to invest more than $8 billion or about N2.6 trillion on Nigerian investments as a demonstration of the New York-based firm’s confidence in the Nigerian economy.
Headquartered in New York City, Milost Global Inc is at the intersection of creative investing and value creation and has more than $25 billion in committed capital. Milost provides alternative capital, mezzanine finance, and alternative lending to a broad range of industries across the world including technology, transport, cannabis, education, distribution, mining, oil and gas, financial services, healthcare, pharmaceuticals, real estate, alternative energy, and infrastructure development.
“Milost is very committed to the further advancement of the Nigerian economy with over one-third of funds being committed to Nigerian investments,” Milost Global had stated in an official statement announcing the arrival of the senior leadership of the firm in Nigeria recently.