Parties to the ongoing litigation between Asset Management Corporation of Nigeria (AMCON) and Shebah Exploration and Production (E&P) Company Limited met on Tuesday September 3. The meeting opened discussions related to seeking an amicable resolution to the various issues that have arisen lately, BusinessDay has learnt.
It was further learnt that the meeting which held in the boardroom of AMCON had in attendance representatives of the obligor company (Shebah Exploration and Production Limited), ABC Orjiako (the Guarantor of the loan), the representatives of the lenders Afrexim bank, Access bank and Polaris bank of which is the subject of an Order of the Federal High Court made on August 15, 2019, representatives of AMCON, and the Receiver/Manager.
No doubt with this development negotiations have begun.
Impressively, while negotiations commenced swiftly, ABC Orjiako, the guarantor of the Shebah loan who had previously paid the sum of $68million from his personal money to the creditors made firm commitment to pay further.
BusinessDay learnt that the respective parties were pleased with the outcome of the meeting. It was also learnt that the Defendant had in the pipeline plans to pay some money to the creditors prior to the AMCON intervention.
Sources at AMCON revealed that in line with the outcome of the meeting, the guarantor will be presenting comprehensive repayment plan for all outstanding loans which are due to the syndicate. The agreed first tranche of payment is expected to be made latest by September 18, 2019.
In 2012 Shebah E and P obtained a $150million loan facility from a consortium of banks (AFREXIM/Diamond- now Access/Skye- now Polaris) led by AFREXIM.
The loan facility was meant for work over and drilling campaign at the Ukpokiti field (OML 108) operated by Shebah E&P.
In the offshore Niger Delta, Shebah drilled a successful horizontal well, the first of its kind and tested 4000 barrels per day of oil and condensate production but encountered large gas reserves.
Shebah required more funds to commercialise the gas to avoid excessive flaring while producing the discovered oil. In 2014, Shebah approached Zenith Bank, which appraised the situation and provided a $200million loan facility fully approved by its board to rescue the situation.
Zenith proposed to pay the consortium of banks $50million to reduce their collective exposure, enhance the facility to $300million, provide Shebah with additional funds to monetize the gas and produce the discovered oil.
Unexpectedly, the AFREXIM consortium rejected the $50million offered by Zenith Bank on the grounds that Zenith should not lead the syndicate and they were not willing to extend the tenure of the facility which was remaining about two and half years as at the time of Zenith’s offer.
The AFREXIM consortium allegedly rejected all the efforts being made by Shebah and proceeded to file an action to call the facility in 2014 (just two years after final draw down). The call of facility ahead of the maturity triggered the default on the loan. On February 19, 2016, Mr. Justice Phillips of the London High Court delivered a judgement in favour of the AFREXIM consortium for the repayment of the $150million loan facility.
The judgement creditors then registered the judgement in Federal High Court in Lagos and applied for enforcement of the judgement. The defendants (Shebah Exploration & Production and ABC Orjiako) immediately opposed the registration and the enforcement of the judgement based on their convictions on rule of law and on the fact that they would like to negotiate an out of court settlement and pay back the loan under a restructured arrangement.
Contrary to the Syndication agreement by the AFREXIM consortium, Polaris Bank is believed to have unilaterally transferred its share of the judgement facility to AMCON.
It is by the fresh case that AMCON is alleged to have obtained the Ex-Parte order.
DIPO OLADEHINDE
