Nigerian SEC approves investor for ailing Wema bank

LAGOS, April 21 (Reuters) - The Nigerian Securities and Exchange Commission (SEC) said on Tuesday that it had approved the sale of a 27 percent stake in ailing Wema Bank (WEMA.LG) to a new investor to revamp its operations.

SW8 Investment Ltd, a consortium headed by an executive director at Skye Bank (SKYE.LG) and of which little is known, got the approval on April 1 and acquired the shares last Thursday in cross trading on the Nigerian Stock Exchange (NSE), the SEC said.

"SEC granted approval for the divestment of 2.7 billion of Wema Bank shares to SW8 Investment Limited to improve the bank's liquidity position," SEC spokesman Lanre Oloyi said.

The price of the stake was not released, but at Tuesday's share price of 2.46 naira, the 27 percent stake would be worth 6.6 billion naira ($45.52 million).

Industry sources had said on Friday that a number of consortiums had been bidding for the 40 percent of shares the central bank seized last year from the former managing director, Jeremiah Adebisi Omoyeni. The consortiums' identities were not known.

SW8 now shares the position of top shareholder with HWS Investments Ltd., which also has 27 percent.

SW8's financial advisers, Greenwich Trust, said SW8 planned to acquire more shares to take control of the ailing lender.

"Based on certain decisions by the core investors (in SW8), there could be need to buy more of the shares. The process is on, we are just awaiting the necessary approval of the regulators," Greenwich executive Muyiwa Ariyo told Reuters.

Wema is one of 25 banking groups to emerge in Africa's top oil producer after reforms in 2005 that reduced the number of operators from 89 mainly weak institutions.

But while other lenders rapidly expanded their operations, Wema's fortunes declined after it was hit by a boardroom crisis that has led to a series of litigations.

Wema's current managing director, Lai Alabi, said SW8 would soon take a controlling interest in the bank.

"The sale of the warehoused shares has been executed, but the process is an ongoing thing we have not finished, very soon the (SW8) core investors will assume control of the bank," Alabi said. ($1 = 145.90 naira) (For full Reuters Africa coverage and to have your say on the top issues, visit: africa.reuters.com/ ) (Reporting by Oludare Mayowa; editing by Tume Ahemba and Karen Foster)