BREAKING NEWS, Business
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The Asset Management Corporation of Nigeria and the MRS Holdings Limited are fighting over N81 billion syndicated loan obtained by the later from a consortium of banks in Nigeria which is now bad debt
| By Anayo Ezugwu | Jul 25, 2016 @ 01:00 GMT |
THE Asset Management Corporation of Nigeria, AMCON, and MRS Holdings Limited are at daggers drawn over the plans by the former to wind down the company. AMCON on Monday, July 11, said it had initiated steps to wind down MRS Holdings Limited over its inability to repay the N81 billion the company owed it.
AMCON said it commenced the wind-down proceeding against MRS Holding Limited owned by Sayyu Dantata, a top businessman, at a Federal High Court in Lagos, following the inability of the firm to settle the outstanding debt. The corporation had in the suit No. FHC/L/CP/923/2016 asked the Federal High Court, Lagos Division, to allow it to force MRS, a major player in the downstream sector of the oil and gas industry in Nigeria, into compulsory liquidation.
The corporation said in a statement that, “MRS entered into an agreement with AMCON in February 2014 to restructure the debt, which then stood at over N74bn. In the agreement executed by Alhaji Dantata and another executive director of the oil company, MRS agreed among other conditions that in the event of default, all concessions granted under the terms of settlement shall be revoked and the facility called in at the discretion of AMCON.
“Alhaji Dantata and one of his directors also signed a default indemnity, which stated that if MRS Holdings Limited failed to pay any sum (of principal, interest or otherwise) due or to become due as agreed, MRS Holdings Limited shall pay additional interest at a default rate determined by AMCON on the unpaid sum from the date when such payment was due up to the default payment.”
AMCON stated that about 400 of its obligors accounted for more than N4.5tn, which is approximately 80 percent of the total outstanding loan balance of the corporation’s over 12,000 accounts with obligors who had become recalcitrant over time despite efforts to recover outstanding sums against them.
However, MRS Holdings Limited said it was not indebted to AMCON. It stated on Tuesday, July 12, that it obtained a syndicated loan from a consortium of banks in Nigeria for a viable project, following which AMCON took over the loan and an agreement was reached with the corporation on the restructuring of the loan to N74 billion. MRS maintained that the said debt of N74 billion had been fully repaid and expressed shock that despite having fully settled the debt, AMCON decided to re-litigate on an already concluded matter.
A statement by the management of the company said, “Our attention has been drawn to a recent publication by the AMCON alleging that MRS Holdings Limited is indebted to it in the sum of N81 billion and that the corporation has instituted Suit No: FHC/L/CP/923/2016 to wind up the company over the inability of MRS to pay the alleged debt.
“MRS challenges in the strongest possible terms the false claim by AMCON that MRS is indebted to it in the sum of N81 billion or any sum at all. The correct position is that MRS obtained a syndicated loan from a consortium of banks in Nigeria for a viable project. AMCON took over the loan. However, it became clear to AMCON that MRS was paying down on the loan and agreed to restructure the loan on agreed terms of N74 billion.
“The said debt has since been fully settled. The terms of settlement was entered as a judgment of court on 29 June 2015, in Suit No FHC/L/CS/1365/2015. MRS is shocked that in spite of having fully settled the debt, AMCON has decided to re-litigate an already concluded matter.
“MRS Holdings Limited understands AMCON’s statutory function to recover debts but by no stretch can this mean harassment of companies.” MRS accused AMCON of adopting a new aggressive debt recovery drive, but stated that it had no problem with the drive insofar as it does not give AMCON a licence to embarrass and harass companies.
“It is not a crime to obtain loans for viable projects. Execution of viable projects leads to job creation and growth of the economy. However, when companies that obtained loans for legitimate businesses are being harassed and embarrassed in the name of aggressive debt recovery, it signals danger for economy growth,” it stated.
The oil marketer said it had taken notice of AMCON’s “frivolous recovery cases against many companies” on similar issues as MRS, adding: “Not surprisingly all the cases were dismissed by the courts.”
MRS disclosed that it was taking legal advice to clear its good name and would bring the necessary action to seek damages for the embarrassment and damage caused the company’s reputation and goodwill by AMCON’s publication and action. The company assured all its customers and business associates that the reports would not affect the company and its subsidiaries’ high quality services that it had always been known for, adding that it would seek redress for the damage caused by the publication.
It also assured the general public that MRS Holdings Limited and its subsidiaries would continue to transact their businesses with the highest ethical standards and in accordance with the extant laws of the country.
AMCON in a statement on Monday said it had initiated steps to wind up MRS Holdings over the inability of the oil marketer to pay N81 billion owed the corporation.
MRS described itself on its website as “an African conglomerate in diverse activities, yet focused on capturing the entire value chain in oil trading, shipping, storage, distribution and retailing. We are one of the largest and most efficient downstream players with solid roots in Nigeria and leading positions in fuels and lubricants market in Cameroon, Benin, Togo and Cote D’Ivoire.”
Some of the subsidiaries of MRS Holdings are MRS Oil Nigeria Plc, which has a lube blending plant at Apapa, modern Avjet facilities in Lagos and Abuja, over 416 retail stations all over the country, and a two-million-litre per day fuel terminal at Apapa, Lagos; MRS Oil & Gas Limited that has a 107-million-litre storage capacity terminal with a jetty at Apapa, Lagos, Isolo truck staging area for over 1,000 trucks, and 15 loading arms gantry with a capacity of 15 million litres per day; and Corlay in Benin Republic, Togo and Cameroon.
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