Otudeko’s Honeywell Group speaks out on controversial First Bank loan
The Honeywell Group said it was managing loan facilities obtained from First Bank of Nigeria Limited and other financial institutions across the country.
The company, in a statement on Sunday, said that, like most businesses, it uses its own equity and borrows from banks and other financial institutions to run its operations.
The company is responding to recent furor over the composition of First Bank’s board and the credit facility secured from the bank.
PREMIUM TIMES has reported how the Central Bank of Nigeria (CBN) has expressed concern that First Bank “has failed to comply with regulatory guidelines in disposing of its interests in Honeywell flour mills despite several reminders. The apex bank also expressed concern over the need to restructure the corporate credit facility.
Amid the furor, Honeywell Group Chairman Oba Otudeko was removed from his role as Chairman of FBN Holdings Plc, the parent company of First Bank Nigeria Limited.
In the same vein, Ibukun Awosika was also removed from his position as Chairman of First Bank, alongside all members of the bank’s board of directors.
The decision, the regulator said, was made “to protect 31 million customers, minority shareholders of First Bank of Nigeria Ltd”.
The CBN also announced the immediate appointment of Tunde Hassan-Odukale as the bank’s chairman. Mr. Hassan-Odukale, until his appointment, was the Managing Director of Leadway Assurance Company.
Honeywell Group, in its reaction, said it had a strong track record of mutually beneficial success with its local and international financiers based on meeting obligations and delivering returns to all shareholders.
The statement said that since 1972, Honeywell Group and First Bank of Nigeria have had a professional business relationship that preceded its investment in the bank more than a decade later.
He said the company’s relationship with First Bank “has always been professional, independent and consistent with all regulatory and industry practices and standards.” The credit facilities obtained from First Bank and other banks were granted after due negotiations, with necessary documentation and in accordance with regulatory policies and industry standards, the statement said.
He added that the Honeywell Group managed all of its credit facilities in accordance with the terms agreed with First Bank and that at no time had any of these facilities been non-performing.
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The company said that in 2015, First Bank, under direction from the Central Bank of Nigeria (CBN), drew its attention to a 2004 circular (BSD/9/2004) which required insider facilities must not exceed 10% of the paid-up capital. shares the capital.
He said that based on this directive, the Honeywell Group then entered into negotiations with the bank to agree on an appropriate repayment structure and the final negotiated position was duly approved by the CBN, adding that it is important to note that the facilities have worked from the beginning and to this day.
The company said that, in accordance with the terms agreed, its facilities with First Bank are adequately secured with collateral in place at over 170% of forced sale value and 230% at open market value.
He said the Honeywell Group continued to meet all of its obligations on its facilities with First Bank under the agreed terms and reduced its exposure by almost 30% in 2.5 years.
“The facilities were billed at market rates and the lender continues to earn significant interest,” the statement said.
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