Obaigbena’s GHL replies to FBN as fight with Otedola deepens

Obaigbena’s GHL replies to FBN as fight with Otedola deepens

The end is yet to be heard in the crisis between Femi
Otedola and media baron, Nduka Obaigbena, as General Hydrocarbons Limited
denies owing First Bank Nigeria $225.8 million.

 

General Hydrocarbons, with ownership linked to Obaigbena,
made this clarification in a statement posted by ThisDay Newspaper on Monday.

 

The company was replying to a report that all its accounts
in financial institutions were frozen by FBN over failure to meet up with a
$225.8 million loan obligation.

 

The development had heightened the dispute between FBN, with
Otedola as chairman and Obaigbena.

 

In a reaction to FBN, GHL clarified that it is not indebted
to the bank in the manner projected by the claim; however, the company entered
into an agreement with FBN over oil production and development of OML 120, and
the project is active and still pending.

 

“We entered a legally binding, enforceable subrogation
agreement with First Bank on May 29, 2021, with FBN agreeing to fund GHL’s
exploration, production, and development of OML 120 in exchange for sharing
profit from oil proceeds from the OML in a 50:50 ratio after statutory payments
and taxes over 8 years.

 

”The FBN 50 percent share will then be used to pay down its
non-performing loans of about $718 million, which was discounted to $60 million
to resolve its solvency issues therefrom.

 

“In its quest to stay afloat, the FBN loan was sold at $600
million as an Eligible Banking Asset (EBA), with comfort from GHL; the FBN then
collected the cash from Assets Management Company of Nigeria, (AMCON), with
which they rebuilt the bank without meeting GHL’s needs.

 

“The FBN non-performing loan arose from FBN’s unsecured and
reckless lending to Atlantic Energy under separate Alliance arrangements,
events in which GHL had no connection with agreements made it clear that the
non-performing loan had nothing to do with GHL beyond the fact that 50 percent
of profits from OML 120 due to FBN under the Subrogation Agreement will be used
by FBN 66ae nexus.

 

“It is important to note that FBN’s credit and risk team
verified and approved all contracts and invoices due to the contractors engaged
for the development and operations of the oil mining lease and made payments
directly to these contractors and service providers.

 

“The allegations of a diversion of the monies advanced to
GHL are therefore befuddling and without merit as to settle the hole created in
its books by the Non-Performing Loan (NPL). For clarity, Atlantic Energy
operated OMLs 26, 30, 34, and 42—very different from GHL’s OML 120 payment,
which was made by FBN directly to service providers after vetting and approval
by its credit and risk teams,” the statement reads.

In the last days, First Bank Nigeria Holdings has been
enmeshed in controversies as its shareholders are divided over Otedola’s
chairmanship.

Source: Obaigbena’s GHL replies to FBN as fight with Otedola deepens

 - NigerianEye
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