●Lenders rally AMCON, more loan facilities turn toxic
Controversy greets AMCON’s alleged takeover of Pan Ocean Group
ver 27 of the indigenous oil firms in Nigeria are at the breaking point as more out of the total $3 billion loan facilities they accessed from banks turn toxic.
The lenders, New Telegraph gathered exclusively at the weekend, have transferred the toxic loans to Asset Management Company of Nigerian (AMCON), which has in turn begun a chase for the bad debtors.
One of the indigenous firms, Seplat Petroleum Development Company, had earlier confirmed that the debt profile of Nigerian oil companies to banks has hit $3 billion, heightening the heavy burden on the financial institutions.
Chief Executive Officer (CEO) of Seplat, Dr. Austin Avuru, who said this at the Nigerian Association of Explorationists (NAPE) second webinar series, entitled, “The New Normal Post Covid-19 for the Oil and Gas sector in Nigeria,” declared that the poor servicing of the debts was being worsened by the Coronavirus pandemic.
The operators in the Nigerian oil and gas sector owe banks about $3 billion that are yet to be mitigated, he said.
Banks have, however, began the seizure of assets the firms used as collateral to access the loans.
The loans pulled by banks from sources including depositors’ money have not only become unperforming, they have also become a big source of worry for the lenders.
The feud between Polaris Bank-led consortium of lenders and Pan Ocean Group over N240 billion loan has degenerated with Asset Management Corporation of Nigeria (AMCON’s) takeover of Pan Ocean Oil Gas company with all its assets including Oil Mining Lease (OML) 147.
Pan Ocean had accessed funding for the project from the consortium of banks led by Polaris Bank Limited (former Skye Bank Plc) for the development and production on Oil Mining Lease (OML) 147, which came from OPL 275 in 2014. OML 147 is expected to attain peak output of 11,000 barrels of crude oil and 90 million standard cubic feet of gas per day when fully operational.
The Polaris Bank-led consortium of lenders involved in the project were, however, uncomfortable with the delays associated with the projects as this has begun to affect depositors’ money in the banks.
“The Polaris Bank-led consortium, as we all know, has passed the loan to AMCON when it turned toxic,” a source close to the deal told this newspaper.
“A big problem is brewing for other oil firms with unperforming loans as the banks have kept turning their toxic loans for AMCON’s takeover. This simply is a big issue for them (firms) because what this means is that their assets will be taken over by AMCON in no time,” He added.
Pan Ocean and a host of other oil companies that have failed in meeting up with repayment plans have written banks explaining that the COVID-19 outbreak and poor oil economy made them to put on hold all planned business executions, head of energy unit in one of the top lenders said.
However, Pan Ocean said in a statement that it was determined to go ahead with the project, which also include the expansion of Phase II of the Ovade-Ogharefe Gas Processing Plant/LPG Propane Plant is designed to expand gas processing capacity at the plant to 200 million standard cubic feet per day.
“We accessed funding from the banking system to facilitate expansion plans which were based on sound investment advice and projections. The funds were invested in assets which are verifiable and within Nigeria.
“We remain committed to working with our financial partners to resolve all outstanding issues. We are committed to the rule of law and due process and will continue to rely on legal due process to resolve these issues despite the provocation and lawlessness of the party.
“We call on the leadership of the judiciary and all lovers of democracy and the rule of law to call the erring parties to order,” Pan Ocean said.
The Federal High Court, presided over by Justice A.M. Liman, in the suit between AMCON vs Everest Nominees Limited, and Dr. Bolaji Ogundare, a subsidiary of Pan Ocean Group, had ordered AMCON and its assignee to take over all the assets of the companies.
Lagos-based oil and gas businessman, Dr. Festus Fadeyi, whose total indebtedness to AMCON is over N240 billion, is the promoter of Pan Ocean Group.
The court had also granted an order appointing AMCON as a Receiver Manager (in accordance with its 2019 Act as amended), and its designated human nominees (Kunle Ogunba Esq.) its privies, and assigns over the assets of Pan Ocean, their corporate guarantors, cronies and cohorts to take over a number of its prime assets over some irreconcilable huge debt owed AMCON by Everest Nominees, Pan Ocean and their promoters as well as directors.