Our First Bank loan is in service, reduced by 30% in 2 years – Honeywell Group – Nairametrics

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The Honeywell Group said its loan with First Bank was being processed as the conglomerate had reduced the facility by 30% over the past two and a half years.

This was disclosed by the group via a statement released on Sunday and seen by Nairametrics.

According to the statement, the company and the bank have enjoyed a professional business relationship since 1975, which preceded the group’s investment in the bank more than a decade later.

According to the Honeywell Group, the credit facilities obtained from First Bank were granted after formal negotiations, with the necessary documentation and in accordance with regulatory policies and industry standards.

The Group further explained that, in accordance with the agreed terms, its facilities are adequately secured with First Bank with guarantees in place at over 170% of forced sale value and 230% at open market value.

He stated : “In 2015, First Bank, under the direction of the Central Bank of Nigeria, drew our attention to a 2004 circular (BSD / 9/2004) which requires insider-related facilities not to exceed 10% of the paid-up share capital.

Based on this directive, we then entered into negotiations with the bank to agree on an appropriate reimbursement structure and the final negotiated position was duly approved by the CBN.

In addition to the above, First Bank, on instruction from CBN, requested additional collateral in the form of shares of FBN Holdings Plc held by the Chairman of the Honeywell Group, Dr Oba Otudeko, citing a circular from 2001. This was duly provided for by an authorization to place a lien on the shares.

Honeywell Group continued to fulfill all of its obligations on its facilities with the bank on agreed terms and reduced its exposure by nearly 30% in 2.5 years. The facilities were billed at market rate and the bank continues to earn significant interest. “

What you should know

  • Nairametrics had reported that the Central Bank of Nigeria ordered Honeywell to repay its obligations to First Bank in full within 48 hours, warning that failure to meet this obligation would cause the CBN to take regulatory action against the insider borrower and the bank.
  • Honeywell group chairman Oba Otudeko also served as chairman of FBN Holdings Plc until apex bank asked him to join other directors on Thursday.
  • The umbrella bank noted in a letter last Wednesday that First Bank had yet to comply with regulatory guidelines regarding the sale of its stake in Honeywell despite several reminders.
  • In addition, the CBN requested First Bank to provide evidence regarding the assignment of interests in Honeywell Flour Mills and Bharti Airtel Nigeria Ltd within 90 days.

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