Amassment Corporation, a US-based financial company, has discarded its KSh49 billion bid for Imperial Bank Assets. The firm says they reached the decision after Kenya Depositors Insurance Corporation (KDIC) showed signs of unwillingness to give feedback.
Earlier on, KDIC had revoked the firm’s acquisition request for the lender’s assets, terming it as below par. In the initial offer, the firm had proposed that it wanted KDIC to contribute cash capital of 20% of what the corporation owes to remaining depositors into the special purpose firm, in order to partially compensate for value declines sustained by loan assets, litigation costs, as well as losses from non-performing loans that the new firm will assume.
However, the firm claims that despite complying with all the guidelines issued by KDIC, the institution is yet to grant them the green light.
While reviewing the offer early this month, the US firm dropped its earlier proposal to have KDIC fund its bid. Thus, KDIC was only to pay for incidental costs of transferring Imperial’s assets to a new company to be controlled by the PE firm.
On their part, KDIC argues that only institutions licensed by the Central Bank of Kenya can acquire assets and deposit liabilities as per KDI Act 2012.
With all this back and forth tussle, Ammassment Corporation has now opted out.
In October 2015, Central Bank placed the lender under receivership. This happened after it emerged that it was operating two sets of books, with a potential fraud of $449 million. This placed depositor funds at risk.
In September, KCB Group said it will only take 7.5 per cent of the deposits and an equivalent percentage of liabilities, lower than the initial offer of 19.7 per cent.