The Asset Management Corporation of Nigeria (AMCON) on Monday said it carried out the order of the Federal High Court, Lagos, to take over Cedar Oil & Gas Exploration and Production Limited over a staggering indebtedness of N29 billion.
C. J. Aneke, a Justice of the Federal High Court in Ikoyi, gave the orders following the failure of Cedar Oil & Gas Exploration and Production Limited as well as its directors, Olajide Omokore, Isiaka Mohammed, Joseph Bazuaye, Silas Ode and others, to pay AMCON their admitted sum of over N15 billion out of the total outstanding indebtedness of N29 billion owed to the recovery agency of the Federal Republic of Nigeria.
Cedar Oil & Gas Exploration and Production Limited’s non-performing loans obligation was sold to AMCON by the defunct Skye Bank, now Polaris Bank.
Several attempts by the corporation to explore a peaceful resolution of the outstanding obligation failed. But the case was eventually brought before the court for settlement and the court ruled in favour of AMCON.
In compliance with the court order, AMCON formally and successfully took possession of all the assets of Cedar Oil & Gas Exploration and Production Limited promoted by Olajide Omokore as ordered by the court through Godwin Nwekoyo, the receiver/manager, who also received protective orders from the court.
The assets which are now under AMCON include Block A, No. 46 Gerrard Road, Ikoyi, Lagos State, comprising 26 flats; Plot 1236, River Niger Street, off River Benue Street, Maitama, Federal Capital Territory, Abuja; and Marion Apartment, Block 8, No. 4 & 5, Onikoyi Estate, Banana Island, Lagos State, consisting of 43 units of apartments.
AMCON is also in possession of No. 33A, Cooper Road, Ikoyi, Lagos State; No. 8, Gerrard Road, Ikoyi, Lagos State, as well as Manson Apartments, No. 6, Gerrard Road, Ikoyi, Lagos State, comprising 60 units of three-bedroom apartments.
“Imagine one company owing N29 billion! We know what N29 billion can do to a country that’s economically challenged. These are guys with private jets, Rolls Royce, yet don’t want to pay back loans they took,” Jude Nwauzor, head, corporate communications at AMCON, told BusinessDay while confirming the takeover.
Nwauzor said top AMCON obligors are taking all Nigerians for a ride. He noted that before getting to this stage with any obligor, AMCON must have patiently tried to resolve the matter without going to court.
“Anytime we end up taking over assets such as in the case of Cedar Oil & Gas Exploration and Production Limited as well as its directors, Olajide Omokore and others, it means all efforts by AMCON to get the obligor to amicably repay the indebtedness have proved abortive,” Nwauzor said.
He said AMCON would continue to go after other oil and gas firms who are indebted to it and have not shown any commitment to pay back.
Ahmed Kuru, managing director/CEO of AMCON, had reiterated the fact that the Corporation would continue to sustain its high tempo of recoveries, by strategically focusing more on enforcements, especially since its top obligors have resorted to hiding under all manner of technicalities of the law to delay the repayment of their debt to the detriment of the Nigerian economy.
As much as 40 percent of the NPLs in the Nigerian banking sector can be traced to the oil & gas sector, which the banks have historically favoured, but the sector has suffered since the 2014 oil price crash.
High NPLs don’t just hurt banks; the whole economy suffers. Borrowers struggle to get additional funding because banks become risk-averse and conscious of their poor asset quality, leading them to focus more on debt recovery.
According to the latest report released by the National Bureau of Statistics (NBS) for the third quarter 2019, NPLs in the oil and gas sector dropped from N1.002 trillion in Q3 2018 to N264 billion in Q3 2019. This suggests that in one year, banks recovered N738.15 billion NPLs in the sector.
DIPO OLADEHINDE
