(Ecofin Agency) - The US private equity firm, Milost Global, plans to invest up to $1 billion in the Nigerian Unity Bank Plc which struggles to fund its recapitalization plan.

According to Bloomberg, Milost offered to invest $700 million in equity and $300 million in five-year bonds that can be converted into shares in the Nigerian bank. Therefore, through a first equity investment, Milost will get an initial stake of about 30% in the Lagos-based bank.

The first part of the agreement could be concluded in Q2, 2018 while the second part will be phased in over four years, as long as Unity Bank has sufficient shares to issue to MilostGlobal.

Let it be noted that Unity Bank was created in 2006 from the merger of nine small-scale banks. It is part of a group of small and mid-size Nigerian banks struggling to rebuild capital after being affected by a slowdown in 2016 as oil prices collapsed.

The NGSE-listed bank, already defaulted to complete its recapitalization plan within the deadline set by the central bank, announced in April 2017 it was looking to sell its non-performing loans to avoid penalties.

For the record, this investment in Unity Bank would be the third of its kind in listed Nigerian companies. Indeed, the New York-based firm has already injected $350 million into the oil company Japaul Oil & Maritime Services Plc and $250 million into Resort Savings & Loans Plc.

Milost's investment strategy is primarily based on the acquisition of equity interests in companies whose shares are trading at less than half of their intrinsic value, through a mechanism combining debt and equity.