Welcome, Guest: Register On Nairaland / LOGIN! / Trending / Recent / NewStats: 3,194,872 members, 7,956,293 topics. Date: Monday, 23 September 2024 at 09:16 AM |
Nairaland Forum / Nairaland / General / Business / AMCON Acquires N275b Bad Loans Of Zenon Oil, Geometric Power, Seawolf (3994 Views)
AMCON Transfers Enterprise, Mainstreet Banks To New Owners / Zenon Oil Investment? / Zenon Oil 10 Million Naira Investment (2) (3) (4)
AMCON Acquires N275b Bad Loans Of Zenon Oil, Geometric Power, Seawolf by Crownvilla(m): 1:10am On Oct 21, 2011 |
AMCON acquires N275b bad loans of Zenon Oil, Geometric Power, Seawolf Prompted by a desire to avert another systemic crisis in the Nigerian banking industry, the Asset Management Corporation of Nigeria (AMCON) Thursday announced it has acquired another N275billion delinquent credit from about 6 banks in respect of various transactions with three indigenous firms. The firms whose bad debts were taken over under the arrangement include Zenon Petroleum, Geometric Power Limited and Seawolf Industries Limited. Under the arrangement which AMCON Managing Director and Chief Executive, Mr Mustafa Chike Obi said was in the best interest of the nation’s economy, the corporation purchased a total of N150billion debt owed about five banks that financial petroleum products imports by Zenon Petroleum a few years ago. The company Daily Sun learnt has been servicing the facility promptly until disagreement arising from interest charges threw spanner into the wheel of the transaction. Banks believed to have funded the Zenon Petroleum deal include, Access Bank Plc, Guaranty Trust Bank Plc, Zenith Bank Plc, FCMB among others. Similarly, AMCON boss hinted the corporation has concluded discussion with First Bank Plc, to take over an estimated N100billion exposure to Seawolf Industries Limited while it has also concluded transactions on the N25billion debt owed Diamond Bank by Geometric Power Systems for the financing of the Independent Power Project in Aba, Abia State. He said ‘’Certain banks have been compelled, in consultation with AMCON, and the Central Bank of Nigeria to sell systematically important loans to AMCON to forestall any further crisis in the future. Most notable among these are loans to Zenon Petroleum, Seawolf Industries and Geometric Power Industries’’. But given a breakdown of the transaction, Chike –Obi stated that AMCON’s involvement in the firms debt imbroglio was basically due to the usually large size of the facilities which he feared could create another systemic crisis if the debtors suddenly default. He explained that though the loans are still performing, it would be dangerous to leave it with the banks because it could destroy the industry if nothing was done. The AMCON boss allayed fears that the corporation’s takeover of the facilities would not mean taking over the indebted companies but strengthen their governance structures and ensure that the loans are repaid promptly, stressing that this would ensure there would be no job losses while critical activities in the firms and their banks are not unduly disrupted. Meanwhile Chike-Obi has said AMCON will conclude its acquisition of non-performing loans of banks by October 31, 2011 having injected about N1.16 trillion for the face value of an estimated N2.78trillion delinquent credit owed 21 banks in the country. This according to him also represented about 95 per cent of all outstanding non -performing loans in the nation’s banking industry. SOURCE http://www.sunnewsonline.com/webpages/news/businessnews/2011/oct/21/bussines-21-10-2011-001.html |
Re: AMCON Acquires N275b Bad Loans Of Zenon Oil, Geometric Power, Seawolf by koruji(m): 1:43am On Oct 21, 2011 |
Geometric Systems Inc is owned by the Minister of Power - Barth Nnaji. I am not suggesting anything, just a note. As Aba Independent Power Project Comes Alive |
Re: AMCON Acquires N275b Bad Loans Of Zenon Oil, Geometric Power, Seawolf by ektbear: 2:42am On Oct 21, 2011 |
Seems shady. How is this ethical? |
Re: AMCON Acquires N275b Bad Loans Of Zenon Oil, Geometric Power, Seawolf by Relax101(m): 3:39am On Oct 21, 2011 |
Is Mustapha Chike Obi not the son of the popular mathematician, Prof Chike Obi? They are acquiring everything acquirable shay? |
Re: AMCON Acquires N275b Bad Loans Of Zenon Oil, Geometric Power, Seawolf by Pukkah: 8:20am On Oct 21, 2011 |
What are they really saying, are the loans performing or not? The story is a bit confusing. On one hand, it says they were performing; in another breath, it says they were delinquent. If Zenon's default arose as a result of disagreement on interest payment, why can't the company be paying back the principal payments that were not in doubt? Why move the loan to AMCON? And is the prime mover of Zenon (Otedola) not a member of the Economic Team in the same way that poster Koruji has noted that Geometric belongs to a sitting Minister? Since the rate at which AMCON will take over the loans is much less than the face value, I expect the shareholders of the affected banks (especially Seawolf's N100billion) to speak on this matter. Did the approval of Seawolf's credit in FirstBank coincide with when Sanusi Lamido was the ED, Risk or the MD of FirstBank? Note that this is what he has severely punished other bank chiefs for. Also, have those banks not been making provisions (partial or full) on those loans? If they have made full provisions, why the need for a take over (especially at a discount)? Why not pursue recovery? Or is there no hope of recovery in which case a number of issues will come up. Nigerians (tax payers) whose monies are funding AMCON should also be interested in what AMCON buys and should ask questions. |
Re: AMCON Acquires N275b Bad Loans Of Zenon Oil, Geometric Power, Seawolf by Pukkah: 1:33pm On Oct 21, 2011 |
Why were the banks 'compelled' to sell the loans to AMCON after they must have made provisions? |
Re: AMCON Acquires N275b Bad Loans Of Zenon Oil, Geometric Power, Seawolf by Nobody: 3:18pm On Oct 21, 2011 |
This one looks like an interesting topic. Where are the pro and anti SLS people? Mod, abeg move to front page make man gbadun this one for weekend. |
Re: AMCON Acquires N275b Bad Loans Of Zenon Oil, Geometric Power, Seawolf by ektbear: 8:52pm On Oct 21, 2011 |
Seems like corruption to me for the FG to buy the bad loan of the minister of power. That would be scandalous at least where I live |
Re: AMCON Acquires N275b Bad Loans Of Zenon Oil, Geometric Power, Seawolf by Pukkah: 8:52am On Oct 22, 2011 |
^^^It is also scandalous in Nigeria but I guess it's been done very quietly without the 'fanfare' that attended the takeover of the toxic loans of other banks whose chiefs Sanusi said ought to have been shot. Whichever way you look at it, the take-over of Geometric loan (owned by the current Minister of Power), Zenon (owned by a current member of the Economic Team), and Seawolf (approved while the current CBN Governor was either the ED, Risk or MD/CEO of First Bank) without clear explanations or guidelines amounts to a conflict of interest. Why did the CBN compel AMCON to takeover the loans at a discount? Is CBN saying there are no more such 'large' or systemically important loans in the banking system? Were the loans performing or not? How much was approved by each bank in favour of the respective companies and what was the outstanding balance on each one? Is AMCON supposed to takeover performing loans? How much was the entire toxic loans in the defunct FINBANK or Bank PHB compared to the volume of Seawolf's loan alone or to Seawolf plus Zenon plus Geometric? One thing is clear on this matter: there are more questions than answers. |
Re: AMCON Acquires N275b Bad Loans Of Zenon Oil, Geometric Power, Seawolf by Pukkah: 9:23pm On Oct 22, 2011 |
About 5 banks gave out a loan of N150b to Zenon and CBN/AMCON wakes up to say it is an 'unusually large' loan. So if this becomes a precedent, it means banks won't syndicate such 'large loans' again? This is in spite of assurances that Nigerian banks are now well-capitalized to fund big ticket transactions. I have a feeling that something is wrong here. |
Re: AMCON Acquires N275b Bad Loans Of Zenon Oil, Geometric Power, Seawolf by Crownvilla(m): 12:31pm On Oct 23, 2011 |
Zenon/Otedola will benefit from the FG "buying" their loan, ditto Geometric which has strong ties/links with Barth Nnaji the Minister of Power. Some things never change eh? |
Re: AMCON Acquires N275b Bad Loans Of Zenon Oil, Geometric Power, Seawolf by Pukkah: 1:10pm On Oct 23, 2011 |
^^^Things are not changing Crownvilla, except against those who have fallen out of favour. I actually want someone to show that this transaction was transparent. For now, there's little or nothing to show that. |
Re: AMCON Acquires N275b Bad Loans Of Zenon Oil, Geometric Power, Seawolf by Pukkah: 1:39pm On Oct 24, 2011 |
AMCON buys Zenon, two others’ N275b debt Read (133) October 21, 2011 / By Kingsley Ighomwenghian, Finance Editor •May compensate owners of nationalised banks •Companies are Zenon Petroleum (N150bn), Seawolf Oilfield Services Limited (N100bn) and Geometric Power Industries (N25bn). •AMCON has acquired N2.78 trillion face value of NPL from 21 banks to date The Asset Management Corporation of Nigeria (AMCON), on Thursday in Lagos said it will conclude the purchase of non-performing loans (NPL)from the nation’s banking industry by October 31. By that date, according to Mustafa Chike-Obi, AMCON’s Managing Director, the corporation “would have acquired N2.78 trillion face value of NPL from 21 banks at a cost of N1.16 trillion. This would represent over 95 per cent of all outstanding NPLs in the banking industry.” Addressing journalists in his office, the AMCON boss said some banks were compelled to sell some loans, including three valued at N275 billion and owed by Zenon Petroleum, Seawolf Oilfield Services Limited and Geometric Power Industries. He insisted that the loans, though “largely performing,” were taken over because of “they could potentially pose a risk, so we compelled the banks to sell them.” Chike-Obi put outstanding loans by Femi Otedola’s Zenon at N150 billion to about eight banks, including United Bank for Africa, Zenith and Access Bank, among others; Seawolf, an oil services outfit. is exposed to First Bank and has outstanding N100 billion; while Geometic Power, owes Diamond Bank N25 billion. He added that the loan was purchased at between 85 and 95 per cent of face value Insisting that the decision and choice of qualifying facilities, were devoid of political considerations, he stressed: “The banks did not want to give up the loans, but (were compelled) because they were systematically important, so we had to get them to give it up… AMCON insisted because the loans are too big for the banks… The borrowers don’t like this (the takeover, because) AMCON is more powerful.” The choice of the loans, which were approved by the Central Bank of Nigeria (CBN), he continued, was arrived at from a pool of all the large loans in the system, the capital base of the banks involved and the concentration of such facilities, noting that the loans had to be performing to be considered. Besides managing the Keystone Bank, Mainstreet and Enterprise Banks – nationalised on August 5, 2011, he said AMCON has purchased a total of 9,000 loans backed by significant shares in several public companies. Having purchased the NPLs, recapitalised the banks, the next phase, he said, is to start managing the portfolio, including recovery, and where necessary – restructuring the loans over the next 10 years. He assured: “We are going to use every tool available to us including litigation (in the process of loan recovery).” Chike-Obi also hinted that discussions were on about looking at the possibility of compensating shareholders of the three nationalised banks, using the average of the other five rescued banks that were swallowed by rivals last month. Such average, he said, would be set aside and used for the compensation, where such is allowed under the enabling legislation. “The government is sympathetic to their plight. It is important to listen to people, but we were resolute and could not be blackmailed, but we would look at a way within the law,” he stressed. The corporation, in the process of loan recovery, he assured would go after the personal assets of promoters of the defaulting companies, even when such a company is liquidated. “They are advised to sit down with us to restructure the loans,” he added, hinting that, may have begun stigmatising companies and individuals whose loans have been bought by AMCON. Going forward, Chike-Obi added, “very few banks will lend to anybody, unless AMCON gives you a clean bill of health, because (it) has superior powers (in terms of loan recovery and enforcement). Citing a recent example, the AMCON boss recalled that “a company owed N12 billion (to the industry), and got a $300 million contract (but soon realised that) no bank would lend.” The company owners were therefore forced to ensure the facility started performing. The collaterals used for the various loans, he explained further, cut across interest in large corporations, housing, agriculture, manufacturing, oil and gas, among others, reminding all that AMCON is not an undertaker but a resolution vehicle. “We would talk to people, try to support them,” and that the corporation is concerned about not fuelling further unemployment, in a country where the average employee supports 10 people. He praised government, because there has been no unwarranted or undue interference in AMCON’s activities, noting with satisfaction that the corporation fulfilled its mandate successfully, making Nigeria’s reform efforts “the best of its kind anywhere in the world.” Source: daily Independent http://webcache.googleusercontent.com/search?q=cache:http://www.proshareng.com/news/15238 |
Re: AMCON Acquires N275b Bad Loans Of Zenon Oil, Geometric Power, Seawolf by Pukkah: 1:41pm On Oct 24, 2011 |
^^^Why should AMCON compel banks to give up 'largely performing' loans at a discount of between 85 to 95 percent? How is a loan of N150billion too large for eight well-capitalized banks? |
(1) (Reply)
Interested In Attending Event Planning And Decoration Training School In Abuja / Banking Stocks Emerge Best Performers, Offer Investors 73% Return In 2017 / Household And Body Items In Lagos!
(Go Up)
Sections: politics (1) business autos (1) jobs (1) career education (1) romance computers phones travel sports fashion health religion celebs tv-movies music-radio literature webmasters programming techmarket Links: (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) Nairaland - Copyright © 2005 - 2024 Oluwaseun Osewa. All rights reserved. See How To Advertise. 53 |