Case 17Acquisition financing in Nigeria
Financing a strategic acquisition, from term sheet to drawdown.
An acquirer had agreed terms for a strategic Nigerian acquisition. Completion depended on a financing package that lenders would fund and regulators would permit, delivered to the same timetable as the share purchase.
- Client
- Strategic acquirer and its lenders (confidential)
- Sector
- Acquisition finance
- Practice
- Banking & Finance
- Jurisdiction
- Nigeria
The brief
Our client needed debt financing to fund the purchase price of a Nigerian target. The lenders required a security package over the acquired business, and the financing had to close simultaneously with the acquisition.
The difficulty in Nigerian acquisition finance is rarely the loan agreement. It lies in the points where corporate law, foreign exchange rules and regulatory consents intersect: whether the target may support the debt used to buy it, how security is perfected, and which approvals must be in hand before funds move.
Our advice
- 01
Financing structure
Advising on the borrowing structure and the sequencing of acquisition and financing steps so that the target could lawfully provide credit support after completion.
- 02
Financial assistance
Analysing the restrictions under the Companies and Allied Matters Act 2020 on a company assisting the acquisition of its own shares, and structuring the security package to remain within them.
- 03
Security package
Drafting and perfecting share charges, debentures and assignments, and completing registration with the Corporate Affairs Commission and the National Collateral Registry.
- 04
Regulatory consents
Identifying and obtaining the merger, sector and foreign exchange approvals on which drawdown depended, including Certificate of Capital Importation requirements for offshore funding.
- 05
Conditions precedent and closing
Running the conditions precedent process and the simultaneous closing of the acquisition and the financing.
Outcome
The financing closed on the acquisition timetable, with a security package that lenders could enforce and a structure that satisfied the statutory restrictions on financial assistance.